On This Page
This set of Micro economics 2 Multiple Choice Questions & Answers (MCQs) focuses on Micro Economics 2 Set 15
Q1 | The demand curve faced by the a monopolistically competitive firmis very elastic if the degree of product differentiation is
- Very low
- Very high
- Zero
- Moderate
Q2 | Which one of the following is not a feature of monopolisticcompetition
- Homogeneous products
- Differentiated products
- Selling cost
- No uniform prices
Q3 | The book “The theory of Monopolistic Competition” is written by
- Alfred Marshal
- E H Chamberlin
- Joan Robinson
- J M Keynes
Q4 | The book “The Economics of Imperfect Competition” is written by
- Alfred Marshal
- E H Chamberlin
- Joan Robinson
- J M Keynes
Q5 | It is assumed that the cost curves of all the firms in themonopolistic competition are
- Different due to product differentiation
- Never considered in equilibrium
- Never formulated
- Same in spite of product differentiation
Q6 | Free entry into monopolistically competitive market ensures that all firms will produce at the lowest point of LAC
- Always
- Sometimes
- Never
- Cannot say
Q7 | Under monopolistic competition, the long run equilibrium of thefirm is established at the
- Minimum point of LAC
- Point where LAC is still falling
- Point where LAC is rising
- Minimum point of LMC
Q8 | In short run a firms in monopolistic competition
- Always earns profit
- Incurs loss
- Earns normal profit only
- May earn normal profit, abnormal profit or incur losses
Q9 | In long run all the firms in the monopolistic competition
- Always earns profit
- Incurs loss
- Earns normal profit only
- May earn normal profit, abnormal profit or incur losses
Q10 | The short run equilibrium level of output of the monopolisticcompetitor is given by
- Price = MC
- Price= AC
- MC=MR
- P=MR
Q11 | When a group of monopolistic competition attains the equilibrium,the firms in the group
- Charge different prices, but produce identical outputs
- Produce different output, but charge the same price
- Charge different price and produce different output
- None of the above
Q12 | The elasticity of average revenue curve of the monopolisticcompetitor, depends on
- The extent of product differentiation
- The number of firms
- Number of buyers
- Both A & B
Q13 | When demand curve is elastic, MR is
- 1
- 0
- Positive
- Negative
Q14 | The best or optimum level of output for the pure monopolist
- MR=MC
- P=MC
- P=AC
- Highest P
Q15 | Which type of competition leads to maximum exploitation ofconsumer
- Perfect competition
- Monopoly
- Monopolistic competition
- Oligopoly
Q16 | In the short run, the monopolist
- Breaks even
- Incurs loss
- Makes profit
- Any of the above
Q17 | The demand for the product of a monopoly firm is
- Inelastic
- Elastic
- Unitary elastic
- Perfectly inelastic
Q18 | If the monopolist incurs loss in the short run, then in the long run
- The monopolist go out of business
- The monopolist will stay in the business
- The monopolist break even
- Any of the above
Q19 | Which of the form of monopoly regulation is the most advantages tothe consumer
- Price control
- Lump sum tax
- Per unit tax
- All of the above
Q20 | The monopolist who is in
- Short run equilibrium will also be in long run equilibrium
- Long run equilibrium will also be in short run equilibrium
- Long run equilibrium may or may not be in short run equilibrium
- None of the above
Q21 | In long run the monopolist can earn abnormal profit because of
- Blocked entry
- High selling price
- Low cost
- Economies of scale
Q22 | Price discrimination under monopoly is of
- One
- Two
- Three
- Four
Q23 | The market in which there is a single seller is called
- Oligopoly
- Monopsony
- Monopoly
- Nine of the above
Q24 | Monopsony refers to
- Single seller
- A few sellers
- Single buyer
- A few buyers
Q25 | Discriminating monopoly is possible if two markets have
- Differing elasticity of demand
- Differing average cost
- Same elasticity
- Different average cost