Micro Economics Analysis Set 3
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This set of Micro Economics analysis Multiple Choice Questions & Answers (MCQs) focuses on Micro Economics Analysis Set 3
Q1 | Under monopolistic competition, an increase in the number of firms producing close substitutes will make the demand curve ofeach firm
- inelastic
- elastic
- downward sloping
- perfectly inelastic
Q2 | 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
Q3 | Which one of the following is not a feature of monopolisticcompetition
- homogeneous products
- differentiated products
- selling cost
- no uniform prices
Q4 | The book “The theory of Monopolistic Competition” is written by
- alfred marshal
- e h chamberlin
- joan robinson
- j m keynes
Q5 | The book “The Economics of Imperfect Competition” is written by
- alfred marshal
- e h chamberlin
- joan robinson
- j m keynes
Q6 | 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
Q7 | Free entry into monopolistically competitive market ensures that allfirms will produce at the lowest point of LAC
- always
- sometimes
- never
- cannot say
Q8 | 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
Q9 | 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
Q10 | 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
Q11 | The short run equilibrium level of output of the monopolisticcompetitor is given by
- price = mc
- price= ac
- mc=mr
- p=mr
Q12 | 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
Q13 | 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
Q14 | Under monopolistic competition, the demand curve of the product of an individual firm depends on the nature and prices of closesubstitutes
- true
- false
- not always
- depends on the nature of the product
Q15 | When demand curve is elastic, MR is
- 1
- 0
- positive
- negative
Q16 | The best or optimum level of output for the pure monopolist
- mr=mc
- p=mc
- p=ac
- highest p
Q17 | Which type of competition leads to maximum exploitation ofconsumer
- perfect competition
- monopoly
- monopolistic competition
- oligopoly
Q18 | In the short run, the monopolist
- breaks even
- incurs loss
- makes profit
- any of the above
Q19 | The demand for the product of a monopoly firm is
- inelastic
- elastic
- unitary elastic
- perfectly inelastic
Q20 | 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
Q21 | 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
Q22 | 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
Q23 | In long run the monopolist can earn abnormal profit because of
- blocked entry
- high selling price
- low cost
- economies of scale
Q24 | Price discrimination under monopoly is of
- one
- two
- three
- four
Q25 | The market in which there is a single seller is called
- oligopoly
- monopsony
- monopoly
- nine of the above