Deck 7: Market Structures and Perfect Competition

Question 1

The following are conditions of perfect competition except

A)Strong barriers to entry
B)Sellers are large in number
C)Commodity produced is Homogenous
D)Buyers are large in number

Answer 1

Strong barriers to entry

Question 2

The following are conditions of perfect competition except

A)Sellers are large in number
B)Single buyer
C)Commodity produced is homogenous
D)Freedom to Entry and exit

Answer 2

Single buyer

Question 3

The condition of short run equilibrium under perfect competition is

A)MC=MR
B)AC=MR
C)AC=AR
D)AR=Selling cost

Answer 3

MC=MR

Question 4

The large number of firms producing the same commodity ensure that the individual firm has no control over

A)Price of the commodity
B)The quantity of the commodity
C)Both of the above
D)None of the above

Question 5

Individual firm has no control on the price of the commodity in the market is a condition of

A)Perfect competition
B)Monopoly
C)Monopolistic competition
D)Bilateral monopoly

Question 6

In a Perfect competitive market

A)Firm is the price giver and the industry is a price taker
B)Firm is the price taker and the industry is a price giver
C)Both are price makers
D)Both are price takers

Question 7

One of the essential conditions of perfect competition is

A)Product Differentiation
B)Multiplicity of prices for identical product at any one Time
C)Many sellers and few buyers
D)Only one price for identical goods at any one time

Question 8

Under perfect market conditions the individual firm in the industry has control over the price of the product.

A)Some
B)Full
C)No
D)None of the above

Question 9

The condition of short run equilibrium under perfect competition is

A)MC=MR
B)MC cuts MR from below
C)MC is rising when it cuts AR
D)All the above

Question 10

Under perfect market conditions mobility of resources and products are

A)Ensured
B)Not ensured
C)Not considered
D)None of the above

Question 11

A firm under perfect competitions shall be in equilibrium when marginal cost will be equal to marginal revenue and marginal cost curve is still

A)Declining
B)Rising
C)Constant
D)None of the above

Question 12

Cross elasticity of demand under Perfect competition is?

A)Zero
B)Infinitely elastic
C)Highly elastic
D)Highly inelastic

Question 13

Which of the following is not a type of market structure?

A)Competitive monopoly
B)Oligopoly
C)Perfect competition
D)All of the above are types of market structures.

Question 14

If a firm sells its output on a market that is characterized by a single seller and many buyers of a homogeneous product for which there are no close substitutes and barriers to long-run resource mobility, then the firm is

A)a monopolist
B)an oligopolist
C)a perfect competitor
D)a monopolistic competitor

Question 15

A perfectly competitive firm should reduce output or shut down in the short run if market price is equal to marginal cost and price is

A)greater than average total cost
B)less than average total cost
C)greater than average variable cost
D)less than average variable cost