MCQExams
0:0:1
CBSE
JEE
NTSE
NEET
Practice
Homework
×
CBSE Questions for Class 11 Commerce Economics Non-Competitive Markets Quiz 3 - MCQExams.com
CBSE
Class 11 Commerce Economics
Non-Competitive Markets
Quiz 3
Under monopolistic competition, the firm seeks to achieve equilibrium position as regards _______________.
Report Question
0%
Price and output
0%
Product adjustment
0%
Adjustment of selling cost
0%
All the above
According to Chamberlin, a firm under monopolistic competition produces an output in the long run equilibrium which is ________________.
Report Question
0%
More than socially optimum
0%
Less than socially optimum
0%
Equal to socially optimum
0%
Any one of the above
In the short-run, the firm will be in equilibrium when (Monopolistic competition) _____________________.
Report Question
0%
Marginal Revenue=Marginal cost
0%
Average Revenue = Average cost
0%
Total Revenue = Total cost
0%
AR = MR = Price
Explanation
Economists tell us that a business can maximize its
profit
by producing at the level where
marginal revenue equals marginal cost, also known as the point of Equilibrium.
As long as
marginal revenue is greater than marginal cost
, it pays to produce more. Each added unit sold will add more to
revenue
than to
costs
.
Chamberlins group concept is criticized by _____________.
Report Question
0%
Stigler
0%
Triffin
0%
Marshall
0%
Both (A) and (B)
Group equilibrium means _________________.
Report Question
0%
Price - output adjustment of a number of firms
0%
Price - output adjustment of an individual firm
0%
Input - output adjustment of a number of firm
0%
Price - profit adjustment of a number of firms
Explanation
Group
equilibrium
means
price output adjustment of a number of firms, instead of an individual firm, whose products are close substitutes.
Group
equilibrium
represents the price and output of organizations having close substitute. However due to product differentiation, it is difficult to form market demand schedules and supply.
In monopolistic competition, the average revenue curve of the firm is ______________.
Report Question
0%
less elastic
0%
more elastic
0%
unit elastic
0%
None of the above
Explanation
Average
curve
will be considerably
more elastic
because the monopolistically
competitive
firm has
less
control over the price that it can charge for its output.
A monopolistic competitive firm follows a /an __________________.
Report Question
0%
Dependent price policy
0%
Independent price policy
0%
Dual price policy
0%
Penetrating price policy
Explanation
Monopolistic competition is a situation where there are a large number of firms selling closely related products. There is also restrictions on entry and exit of firms. Everybody has the freedom to set their prices of their choices. Hence, a monopolistic competitive firm follows an independent price policy.
Excess capacity doctrine of Chamberlin is criticized by __________.
Report Question
0%
Harrod
0%
Kaldar
0%
Triffin
0%
Both (A) and (B)
The firms under imperfect competition operates with ____________.
Report Question
0%
Less capacity
0%
Excess capacity
0%
Normal capacity
0%
Either (A) or (B)
Explanation
Monopolistically
competitive
firms
operate
with excess capacity
because the zero-profit tangency equilibrium occurs along the downward-sloping part of a
firm's
short-run average cost curve, so the
firm's
plant has the
capacity
to produce more output at lower average cost than it is actually producing.
In the long-run, the firm under monopolistic competition is in equilibrium when ___________.
Report Question
0%
MR=MC
0%
AR=AC
0%
TR>TC
0%
both (A) and (B)
Explanation
A monopolistic firm produces at a level where MR=MC even in the short run. In case MR>MC, it will increase production because each unit produced earns more than its cost. This will continue till MR becomes equal to MC. If the firm produces at a level where MR<MC, each unit produced costs more than it earns, and the firm should reduce production to the level when MR becomes equal to MC.
In the long run, other firms are attracted by the huge profits, and given the absence of barriers to entry and exit, other firms also bring out similar products. The competition increases and the firm can no longer charge high prices. It, therefore, limits the average price to average cost and no longer earns supernormal profit.
The demand curve under monopolistic competition is _______________.
Report Question
0%
Horizontal
0%
Infinitely elastic
0%
Negatively sloped and highly elastic
0%
Negatively sloped and highly inelastic
Explanation
The
demand
curve
for an individual firm is downward sloping
in
monopolistic
competition
,
in
contrast to perfect
competition
where the firm's individual
demand
curve
is perfectly elastic. This is due to the fact that firms have market power: they can raise prices without losing all of their customers.
The upper position of the kinked demand curve is relatively __________.
Report Question
0%
less elastic
0%
more elastic
0%
more inelastic
0%
inelastic
The term Oligopoly is derived from
Report Question
0%
Greek word
0%
Latin word
0%
French word
0%
German word
Explanation
Oligopoly is the market in which the behaviour of only small firms dominate. The market is highly concentrated. The term oligopoly is derived from the Greek word.
Oligopoly is also referred to as
I. Limited competition
II. Incomplete monopoly
III. Multiple monopoly
IV. Bilateral monopoly
Report Question
0%
III and IV are correct
0%
I, II and IV are correct
0%
I, II and III are correct
0%
All are correct
Explanation
Oligopoly is a situation where there are few firms who dominates the market. The market is very highly concentrated. There is no monopoly in this but the firms are divided into groups using the group theory. Hence, it is referred to as limited competition, incomplete monopoly as well as multiple monopoly.
The best level of output for the monopolistic competitor is the output at which ________________.
Report Question
0%
MR=MC
0%
MR=AC
0%
MR>MC
0%
MR=AR
Explanation
The best level of output for a monopolistic firm is when MC=MR, or the marginal revenue equals marginal cost. If the firm is producing at a level where MR>MC, then the firm shall increase the output till MR becomes equal to MC.
If the firm produces at a level where MR<MC, then each unit produced costs more than it earns and the firm should reduce production to the point where MR=MC.
Examples of pure oligopolies industries
I. Cement
II. Steel
III. Copper and aluminium
IV. Automobiles
Report Question
0%
I and II are correct
0%
II and III are correct
0%
I, II and III are correct
0%
All are correct
Explanation
Oligopoly is a situation where there are few firms who dominates the market. The market is very highly concentrated. There is no monopoly in this but the firms are divided into groups using the group theory. Examples of pure oligopolies industries are cement, steel and copper and aluminium industry because these all falls in the same categories which is related to construction.
The Game theory is applied to _____________ market.
Report Question
0%
Monopoly
0%
Monopolistic competition
0%
Oligopoly
0%
Pure competition
Explanation
In an
oligopoly
, firms are affected not only by their own production decisions, but by the production decisions of other firms in the market as well.
Game
theory
models situations in which each actor, when deciding on a course of action, must also consider how others might respond to that action.
Dominant price leadership is also called ____________.
Report Question
0%
Pure monopoly
0%
Open monopoly
0%
Partial monopoly
0%
Discriminating monopoly
If the product produced by the competing firms is homogeneous, it is called:
Report Question
0%
Pure oligopoly
0%
Open oligopoly
0%
Collusive oligopoly
0%
Partial oligopoly
Explanation
Oligopoly is the market in which the behaviour of only small firms dominate. The market is highly concentrated. The term oligopoly is derived from the Greek word. They produce products which are homogeneous and are not close substitutes. Such a market is called as pure oligopoly.
In case of short-run equilibrium, a perfectly competitive firm while earning abnormal profits operates at an output level where
Report Question
0%
Marginal cost is the minimum
0%
Average cost is the minimum
0%
Both marginal cost and average cost are equal
0%
Marginal cost is higher than average cost
Explanation
In the case of short-run equilibrium, a perfectly competitive firm while earning abnormal profits operates at an output level where MC>AC.
A firm in the short run earns abnormal profits when at the best level of output, the market price exceeds the short-run average total cost.
Which of the following concepts is considered as a myth?
Report Question
0%
Oligopoly
0%
Perfect competition
0%
Monopoly
0%
Imperfect competition
Match the following:
A) Perfect competition
i) No control
B) Monopolistic competition
ii) Some control
C) Oligopoly
iii) Practically some control
D) Monopoly
iv) Usual control
Report Question
0%
(a)-(i), (b)-(ii), (c)-(iii), (d)-(iv)
0%
(a)-(ii), (b)-(iii), (c)-(iv), (d)-(i)
0%
(a)-(iii), (b)-(ii), (c)-(iv), (d)-(i)
0%
(a)-(iv), (b)-(iii), (c)-(ii), (d)-(i)
A perfectly competitive market in the short run will be in equilibrium where _______.
Report Question
0%
MC $$=$$ AC
0%
MC $$=$$ MR
0%
MC $$=$$ Zero
0%
None of the above
Which of the following is the best example of Agreement between oligopolists?
Report Question
0%
GATT
0%
OPEC
0%
WTO
0%
UNIDO
Monopolists prefer to sell the products in the markets with______.
Report Question
0%
Elastic demand
0%
Unitary elastic demand
0%
Inelastic demand
0%
Absence of elasticity of demand
Explanation
Monopolists prefer to sell the products in the markets with elastic demand.
A monopolist wishing to maximise profit produces the output up to that amount at which MC = MR. Since marginal costs are always positive, a reduction in output will reduce total costs.
A monopoly firm will never choose a price and output in the inelastic range of the demand curve.
Match the following:
List-I
List-II
(i) Dumping
(a) Monopolistic competitive firm
(ii) Kinked Revenue Curve
(b) Oligopoly firm
(iii) Horizontal straight line revenue curve
(c) Perfectively competitive firm
(iv) Large number of buyers and sellers
(
d) Discriminatory monopoly.
with differentiated products
Report Question
0%
$$(i) - (a), (ii) - (d), (iii) - (c), (iv) - (b)$$
0%
$$(i) - (b), (ii) - (d), (iii) - (a), (iv) - (c)$$
0%
$$(i) - (d), (ii) - (b), (iii) - (c), (iv) - (a)$$
0%
$$(i) - (a), (ii) - (b), (iii) - (c), (iv) - (d)$$
Match the items in List - I with those in List-II and select the correct code for the answer:
List - I
List - II
(a) Monopoly
Price Taker
(b) Monopolistic competition
Homogeneous product's price maker
(c) Perfect competition
Heterogeneous product
(d) Oligopoly
Price Rigidity
Report Question
0%
$$(a) - 2, (b) - 3, (c) - 1, (d) - 4$$
0%
$$(a) - 1, (b) - 2, (c) - 4, (d) - 3$$
0%
$$(a) - 3, (b) - 4, (c) - 2, (d) - 1$$
0%
$$(a) - 4, (b) - 1, (c) - 3, (d) - 2$$
Explanation
Monopoly: Under this type of market price is determined by the firm itself.
Monopolistic competition: Under this type of market product is different.
Perfect competition market: Under this type of market, the industry determines the price and the firm is a price taker.
Oligopoly market: Under this type of market firms stick to the same price over time leading to price rigidity under oligopoly.
Hence option A is correct.
Monopoly means ______.
Report Question
0%
single buyer
0%
many sellers
0%
single seller
0%
many buyers
A market structure in which there is a single seller is called _________.
Report Question
0%
perfect competition
0%
no competition
0%
monopoly
0%
none of the above
Explanation
Monopoly is a firm where there is only a single seller who sells unique product, which has no close substitute, and has a full control over the firm. Hence, a market structure in which there is a single seller is called monopoly.
In case of zero cost, which of the following is true for a monopoly?
Report Question
0%
Profit is maximum when TR is maximum
0%
Profit is maximum when MR is zero
0%
Both A and B
0%
None of these
0:0:1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
0
Answered
0
Not Answered
0
Not Visited
Correct : 0
Incorrect : 0
Report Question
×
What's an issue?
Question is wrong
Answer is wrong
Other Reason
Want to elaborate a bit more? (optional)
Practice Class 11 Commerce Economics Quiz Questions and Answers
<
>
Support mcqexams.com by disabling your adblocker.
×
Please disable the adBlock and continue.
Thank you.
Reload page
