Question 1

Marginal revenue curve under perfect competition is

Accepted Answer

A) upward sloping 
B) downward sloping 
C) horizontal straight line 
D) vertical straight line 
A) upward sloping 
B) downward sloping 
C) horizontal straight line 
D) vertical straight line C

Question 2

In the long run, a competitive firm can earn

Accepted Answer

A) normal profit 
B) super normal profit 
C) loss 
D) any of the above 
A) normal profit 
B) super normal profit 
C) loss 
D) any of the above A

Question 3

Which of the following industry is most closely approximates the perfectly competitive model.

Accepted Answer

A) automobiles 
B) cigarette 
C) newspaper 
D) wheat farming 
A) automobiles 
B) cigarette 
C) newspaper 
D) wheat farming D

Question 4

Given the supply of a commodity, in the market period, the price of a commodity is determined by

Accepted Answer

A) the market demand curve alone 
B) the market supply curve alone 
C) the market demand curve and the market supply curve 
D) none of the above 
A) the market demand curve alone 
B) the market supply curve alone 
C) the market demand curve and the market supply curve 
D) none of the above

Question 5

Total profit is maximum when

Accepted Answer

A) total revenue is equal to total cost 
B) total revenue is greater than total cost 
C) the positive difference between total revenue and total costs is largest. 
D) all of the above 
A) total revenue is equal to total cost 
B) total revenue is greater than total cost 
C) the positive difference between total revenue and total costs is largest. 
D) all of the above

Question 6

Which one of the following is a feature of a perfect competition

Accepted Answer

A) group behavior 
B) selling cost 
C) homogeneous product 
D) differentiated product 
A) group behavior 
B) selling cost 
C) homogeneous product 
D) differentiated product

Question 7

If price is equal to average cost, in the short-run, the competitive firm can earn

Accepted Answer

A) only normal profit 
B) super normal profit 
C) loss 
D) all of the above 
A) only normal profit 
B) super normal profit 
C) loss 
D) all of the above

Question 8

Marginal revenue curve under imperfect competition is

Accepted Answer

A) upward sloping 
B) downward sloping 
C) horizontal straight line 
D) vertical straight line 
A) upward sloping 
B) downward sloping 
C) horizontal straight line 
D) vertical straight line

Question 9

Equilibrium price is determined under perfect competition by

Accepted Answer

A) the market demand 
B) the market supply 
C) the interaction between market demand and market supply 
D) none of the above 
A) the market demand 
B) the market supply 
C) the interaction between market demand and market supply 
D) none of the above

Question 10

If price is greater than average cost, in the short-run, the competitive firm can earn

Accepted Answer

A) normal profit 
B) super normal profit 
C) loss 
D) all of the above 
A) normal profit 
B) super normal profit 
C) loss 
D) all of the above

Question 11

If price is less than average cost, in the short-run, the competitive firm can earn

Accepted Answer

A) normal profit 
B) super normal profit 
C) loss 
D) all of the above 
A) normal profit 
B) super normal profit 
C) loss 
D) all of the above

Question 12

Average revenue curve under imperfect competition is

Accepted Answer

A) upward sloping 
B) downward sloping 
C) horizontal straight line 
D) vertical straight line 
A) upward sloping 
B) downward sloping 
C) horizontal straight line 
D) vertical straight line

Question 13

Average revenue curve under perfect competition is

Accepted Answer

A) upward sloping 
B) downward sloping 
C) horizontal straight line 
D) vertical straight line 
A) upward sloping 
B) downward sloping 
C) horizontal straight line 
D) vertical straight line

Question 14

Break-even point is a point where price is equal to

Accepted Answer

A) ac 
B) avc 
C) afc 
D) mc 
A) ac 
B) avc 
C) afc 
D) mc

Question 15

Under perfectly competitive market an individual seller is a

Accepted Answer

A) price taker 
B) price maker 
C) individual seller can influence the price 
D) none of the above 
A) price taker 
B) price maker 
C) individual seller can influence the price 
D) none of the above

Question 16

Uniform price is a feature of

Accepted Answer

A) perfect competition 
B) monopoly 
C) monopolistic competition 
D) oligopoly 
A) perfect competition 
B) monopoly 
C) monopolistic competition 
D) oligopoly

Question 17

A perfectly competitive firm gets only normal profit when

Accepted Answer

A) mc = mr 
B) ac = ar 
C) ac < ar 
D) mc = ar 
A) mc = mr 
B) ac = ar 
C) ac < ar 
D) mc = ar

Question 18

Which of the following is not a feature of a perfectly competitive market

Accepted Answer

A) large number of buyers and sellers 
B) homogeneous product 
C) group behaviour 
D) perfect competition 
A) large number of buyers and sellers 
B) homogeneous product 
C) group behaviour 
D) perfect competition

Question 19

The condition of equilibrium of the industry under perfect competition is

Accepted Answer

A) mc = mr 
B) mc = ac 
C) mc = mr = ar 
D) mc = ac = ar 
A) mc = mr 
B) mc = ac 
C) mc = mr = ar 
D) mc = ac = ar

Question 20

Perfect competition prevails when the demand for the output of each producer is

Accepted Answer

A) elastic 
B) perfectly elastic 
C) inelastic 
D) perfectly inelastic 
A) elastic 
B) perfectly elastic 
C) inelastic 
D) perfectly inelastic

Marginal revenue curve under perfect competition is

In the long run, a competitive firm can earn

Which of the following industry is most closely approximates the perfectly competitive model.

Given the supply of a commodity, in the market period, the price of a commodity is determined by

Total profit is maximum when

Which one of the following is a feature of a perfect competition

If price is equal to average cost, in the short-run, the competitive firm can earn

Marginal revenue curve under imperfect competition is

Equilibrium price is determined under perfect competition by

If price is greater than average cost, in the short-run, the competitive firm can earn

If price is less than average cost, in the short-run, the competitive firm can earn

Average revenue curve under imperfect competition is

Average revenue curve under perfect competition is

Break-even point is a point where price is equal to

Under perfectly competitive market an individual seller is a

Uniform price is a feature of

A perfectly competitive firm gets only normal profit when

Which of the following is not a feature of a perfectly competitive market

The condition of equilibrium of the industry under perfect competition is

Perfect competition prevails when the demand for the output of each producer is

Price Determination and Market Structures

Monopolistic Competition and Monopoly

Understanding Monopoly, Price Discrimination, and Oligopoly in Economics

Microeconomics Concepts and Markets

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Exam 1: Understanding Perfect Competition in Economics

Marginal revenue curve under perfect competition is

In the long run, a competitive firm can earn

Which of the following industry is most closely approximates the perfectly competitive model.

Given the supply of a commodity, in the market period, the price of a commodity is determined by

Total profit is maximum when

Which one of the following is a feature of a perfect competition

If price is equal to average cost, in the short-run, the competitive firm can earn

Marginal revenue curve under imperfect competition is

Equilibrium price is determined under perfect competition by

If price is greater than average cost, in the short-run, the competitive firm can earn

If price is less than average cost, in the short-run, the competitive firm can earn

Average revenue curve under imperfect competition is

Average revenue curve under perfect competition is

Break-even point is a point where price is equal to

Under perfectly competitive market an individual seller is a

Uniform price is a feature of

A perfectly competitive firm gets only normal profit when

Which of the following is not a feature of a perfectly competitive market

The condition of equilibrium of the industry under perfect competition is

Perfect competition prevails when the demand for the output of each producer is

Price Determination and Market Structures

Monopolistic Competition and Monopoly

Understanding Monopoly, Price Discrimination, and Oligopoly in Economics

Microeconomics Concepts and Markets

Filters