Which feature describes a perfectly competitive market?
Correct answer C. Many buyers and sellers
Topic / 84 questions
Market MCQs
Market MCQs are multiple-choice questions on how markets set prices and quantities, covering demand and supply shifts, consumer surplus, price ceilings and floors, externalities, public goods and natural monopoly. They help economics students and competitive exam candidates apply market theory. Each question has an instant answer so you can test your reasoning and correct it quickly.
- Miscellaneous Economics 737
- Basic of Economics 430
- Markets, Efficiency And The Public Interest 167
- Agriculture & Irrigation System of Pakistan 126
- Market 87
- Macroeconomic Issues and Analysis 75
- Money, Interest Rates And Output 73
- Introduction To Economics 70
- Population And Development 62
- Profit Maximizing Under Perfect Competition And Monopoly 56
- Income Inequality 52
- Non-Tariff Trade Barriers 48
- Aggregate Supply, Unemployment And Inflation 45
- Natural Resources and the Environment Toward Sustainable Development 44
- Costs , Supply And Perfect Competition 44
- Human Capital 42
- Labour Market 39
- Monopoly 35
- Long Term Economic Growth 30
- Inflation & Productivity 30
- Regional Trading Arrangements 29
- Characteristics and Institutions of Developing Countries 24
- Oligopoly 23
- Consumer Theory vs. Real Consumers 20
- Applied Microeconomics 20
- Alternative Theories Of The Firm 20
- Public Goods 20
- Balance of Payments, Aid and Foreign Investment 19
- Prices, Wages & Taxes 19
- Comparative GDP 19
- Budget Deficits And The Trade Balance 18
- Macroeconomic Policy Tools 18
- Asymmetric Information 17
- Application of Economics 16
- Production Factors 16
- Monopoly & Competition 15
- Capital Formation, Investment Choice, Information Technology, And Technical Progress 15
- Monetary, Fiscal And Incomes Policy, And Inflation 15
- Average And Total Cost 14
- Poverty, Malnutrition, And Income Inequality 12
- Monetary Union 10
According to the law of demand, what happens when the price of a good rises?
Correct answer B. Decreases the quantity demanded for that good
If higher consumer incomes cause demand for camping equipment to fall, what kind of good is camping equipment?
Correct answer A. An inferior good
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Which of these would shift the demand curve for watches to the right?
Correct answer C. A decrease in the price of watch batteries if watch batteries and watches are complements
What happens when the price of a good is set above the equilibrium price?
Correct answer D. There is a surplus and the price will fall
What is true when the price of a good equals the equilibrium price?
Correct answer A. The quantity demanded is equal to the quantity supplied and the price remains unchanged
What does a decrease, or leftward shift, in the supply of a good tend to cause?
Correct answer B. An increase in the equilibrium price and a decrease in the equilibrium quantity
Both the supply of and demand for personal computers increase, but supply rises by more than demand. What should we expect in the market for personal computers?
Correct answer D. The equilibrium quantity to rise and the equilibrium price to fall
A frost wipes out much of Florida’s orange crop while consumer tastes shift towards orange juice. What happens to the equilibrium price and quantity of orange juice?
Correct answer E. Price will increase, quantity is ambiguous
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If buyers and sellers of wheat both expect its price to rise soon, what should happen to today’s equilibrium price and quantity of wheat?
Correct answer D. Price will increase, quantity is ambiguous
What normally happens in a market when demand increases?
Correct answer B. A higher equilibrium price and output
What will a fall in production costs do in a market?
Correct answer C. Shift the supply curve
With a normal downward sloping demand curve and upward sloping supply curve, what could raise the equilibrium price?
Correct answer A. An increase in demand
What can cause a movement along the demand curve?
Correct answer B. A shift in supply
What can cause a movement along the supply curve?
Correct answer D. A shift in demand
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Which statement best defines consumer surplus?
Correct answer D. The difference between the price a consumer pays for an item and the price he/she is willing to pay
A shift in demand will change price by more than quantity when supply is which of the following?
Correct answer C. Price inelastic
A shift in supply will change price by more than quantity when the price elasticity of demand is which of the following?
Correct answer A. The price elasticity of demand is –0.2
What effect should a rise in demand for a product have on the market equilibrium?
Correct answer D. Increase equilibrium price and quantity
How does a free market deal with a pure public good?
Correct answer B. Not be provided in the free market
About Market MCQs
This Economics topic applies the demand and supply model to real situations. Questions ask how equilibrium changes when tastes shift or when supply and demand both rise, why farmers' earnings can fall after a good harvest, and what happens when a government fixes prices below equilibrium. Other items cover consumer surplus, rationing, the elasticity conditions that decide whether a supply shift moves price or quantity more, externalities, public goods, corrective taxes and natural monopoly cost curves.
Market analysis forms the core of microeconomics papers and is a favourite of examiners because it tests reasoning rather than memory. Many questions can be answered in seconds with a quick mental sketch of supply and demand curves. Practising these MCQs prepares you for economics optionals in CSS and PMS, lecturer and UGC NET papers, and the economics sections of bank officer tests in the region.
Key facts to remember
- A price ceiling set below equilibrium price creates a shortage of the good.
- A price floor set above equilibrium price creates a surplus.
- Consumer surplus is the difference between what buyers are willing to pay and what they actually pay.
- Externalities arise when private costs or benefits differ from social costs or benefits.
- A natural monopoly has declining average cost over a large range of output.
- When demand is inelastic, an increase in supply can reduce producers' total revenue.
Exams that include Market MCQs
Pakistan
- CSS
- PMS
- FPSC
- PPSC
- Lecturer tests
India
- UGC NET
- UPSC CSE
- IBPS PO
- State PSC exams
Bangladesh
- BCS
- Bangladesh Bank recruitment
- Bank job exams
How to prepare for Market MCQs
- Sketch demand and supply curves for every scenario question, as a ten-second diagram usually reveals the answer.
- Remember that when both curves shift, only one of price or quantity has a definite direction.
- Link elasticity to revenue: with inelastic demand, price and total revenue move in the same direction.
- Learn the difference between a shift of a curve and a movement along it, a common trap in options.
Frequently asked questions
What happens when the government fixes a price below equilibrium?
A binding price ceiling below equilibrium raises quantity demanded and lowers quantity supplied, creating a shortage. Goods must then be rationed by queues, coupons or other non-price methods, and black markets may develop where buyers pay above the legal price.
How many Market MCQs are on MCQs360?
There are 87 Market MCQs on MCQs360 in the Economics subject. Every question shows its answer instantly, and the set is free to practise without registration. Because many items need short reasoning, they are ideal for building exam-day speed.
Why can a good harvest reduce farmers' income?
Demand for most farm products is price inelastic. When a good harvest increases supply, price falls by a larger percentage than quantity sold rises, so total revenue to farmers falls. This is sometimes called the paradox of the bumper harvest.
Which exams ask Market MCQs?
Market questions appear in CSS and PMS economics papers, FPSC and PPSC lecturer tests, UGC NET Economics and UPSC CSE in India, bank officer exams such as IBPS PO, and BCS and Bangladesh Bank recruitment tests.
Last reviewed October 2026