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Free download in PDF Market Structure Multiple Choice Questions and Answers for competitive exams. These short objective type questions with answers are very important for Board exams as well as competitive exams. These short solved questions or quizzes are provided by Gkseries.
(1)
Which of the following statements is true for both monopolistically competitive and oligopolistic industries?
[A]
Firms have some degree of control over prices.
[B]
Producers cannot benefit from knowing other firms' plans.
[C]
It is impossible for new firms to enter the industries.
[D]
Collusion and the creation of cartels is common.
Answer: Firms have some degree of control over prices.
(2)
Which of the following best describes an oligopoly?
[A]
many monopolistically competitive firms
[B]
a few firms sharing monopoly power
[C]
a former monopoly that has been broken up by the government
[D]
a government-granted franchise or monopoly
Answer: a few firms sharing monopoly power
(3)
Which of the following is not a type of market structure?
[A]
Competitive monopoly
[B]
Perfect competition
[C]
Oligopoly
[D]
All of the above are types of market structures.
Answer: Competitive monopoly
(4)
If the market demand curve for a commodity has a negative slope then the market structure must be
[A]
The market structure cannot be determined from the information given.
[B]
imperfect competition.
[C]
perfect competition.
[D]
monopoly.
Answer: The market structure cannot be determined from the information given.
(5)
If a firm sells its output on a market that is characterized by many sellers and buyers, a homogeneous product, unlimited long-run resource mobility, and perfect knowledge, then the firm is a
[A]
a perfect competitor.
[B]
a monopolistic competitor.
[C]
a monopolist.
[D]
an oligopolist.
Answer: a perfect competitor.
(6)
Marginal revenue is equal to price for which one of the following types of market structure?
[A]
Perfect competition
[B]
Monopolistic competition
[C]
Monopoly
[D]
Oligopoly
Answer: Perfect competition
(7)
Which of the following industries is most likely to be monopolistically competitive?
[A]
The car repair industry
[B]
The electrical generating industry
[C]
The automobile industry
[D]
None of the above
Answer: The car repair industry
(8)
Product variation refers to
[A]
an activity undertaken by a firm to increase demand.
[B]
an activity undertaken by a firm to make demand more price inelastic.
[C]
a problem with quality control that tends to decrease demand.
[D]
None of the Sabha
Answer: an activity undertaken by a firm to increase demand.
(9)
If an imperfectly competitive firm is producing a level of output where marginal cost is equal to marginal revenue, marginal revenue is below average variable cost, and price is equal to average total cost, then the firm is
[A]
minimizing short-run average total cost.
[B]
in short-run equilibrium.
[C]
in long-run equilibrium.
[D]
breaking even.
Answer: minimizing short-run average total cost.
(10)
If an imperfectly competitive firm is producing a level of output where marginal cost is equal to marginal revenue, marginal revenue is below average variable cost, and price is equal to average total cost, then the firm
[A]
should increase output.
[B]
should shut down.
[C]
should decrease output, but should not shut down.
[D]
None of the above is correct.
Answer: None of the above is correct.
(11)
The demand curve faced by a monopolistically competitive firm is
[A]
elastic.
[B]
unit elastic.
[C]
perfectly elastic.
[D]
inelastic.
(12)
Which of the following is a characteristic of monopolistic competition?
[A]
Easy entry into and exit from the industry.
[B]
A differentiated product.
[C]
Few sellers.
[D]
All of the above are characteristics of monopolistic competition.
(13)
Which of the following is a differentiated product?
[A]
An automobile.
[B]
A hamburger.
[C]
A shirt.
[D]
All of the above are differentiated products.
Answer: All of the above are differentiated products.
(14)
Which of the following types of firms is likely to be a monopolistic competitor?
[A]
An automobile manufacturer
[B]
A restaurant
[C]
A local telephone company.
[D]
All of the above are likely to be monopolistic competitors
(15)
A monopolist produces 14,000 units of output and charges $14 per unit. Its marginal revenue is $8, its marginal cost is $7 and rising, its average total cost is $10, and its average variable cost is $9. The monopolist should
[A]
increase output, which will result in an increase in the firm's positive economic profit.
[B]
increase output, which will reduce the firm's economic losses.
[C]
shut down, which will reduce the firm's economic losses.
[D]
decrease output, which will result in an increase in the firm's positive economic profit
Answer: increase output, which will result in an increase in the firm's positive economic profit.
(16)
The value of the U.S. dollar on the foreign exchange market will tend to
[A]
increase if there is an increase in the demand for U.S. exports by foreign countries.
[B]
decrease if there is an increase in the demand for foreign imports by the United States.
[C]
decrease if monetary authorities intervene on the foreign exchange market by selling U.S. dollars for foreign currencies.
[D]
All of the above are correct.
Answer: All of the above are correct.
(17)
A depreciation of the U.S. dollar relative to foreign currencies will make
[A]
foreign imports less expensive in the United States.
[B]
U.S. exports less expensive in foreign countries.
[C]
the demand for U.S. exports decrease.
[D]
All of the above are correct.
Answer: U.S. exports less expensive in foreign countries.
(18)
When a perfectly competitive industry is in long-run equilibrium, all firms in the industry
[A]
produce a level of output where long-run marginal cost is equal to long-run average cost.
[B]
produce a level of output where short-run marginal cost is equal to short-run average total cost.
[C]
earn zero economic profits.
[D]
All of the above are correct.
Answer: All of the above are correct.
(19)
A natural monopolyrefers to a monopoly that is defended from direct competition by
[A]
control over a vital input.
[B]
a government franchise.
[C]
a patent or copyright.
[D]
economies of scale over a broad range of output.
Answer: economies of scale over a broad range of output.
(20)
In the short run, a monopolist will shut down if it is producing a level of output where marginal revenue is equal to short-run marginal cost and price is
[A]
less than average variable cost.
[B]
greater than average variable cost.
[C]
greater than average total cost.
[D]
less than average total cost.
Answer: less than average variable cost.
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