Which of these products is least likely to be sold in a monopolistically competitive market?
Correct answer C. Cotton
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Economics MCQs
Page 17 of Economics multiple-choice questions with answers. Tap an option to check yourself.
Page 17 of 131
- 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
In the short run, if price is above average total cost in a monopolistically competitive market, what happens?
Correct answer C. Profits and firms enter the market
Which of these firms has the least incentive to advertise?
Correct answer D. A wholesaler of crude oil
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What is one source of inefficiency in monopolistic competition?
Correct answer D. Since price is above marginal cost, some units that buyers value in excess of their cost of production are not produced, causing a deadweight loss
In the term “monopolistic competition”, what does the word “competition” refer to?
Correct answer C. There are many sellers in a monopolistically competitive market and there is free entry and exit, just like a competitive market
Which of these firms is most likely to spend a large share of its revenue on advertising?
Correct answer B. The producer of a highly differentiated consumer product
Which of the following is NOT presented as a criticism of advertising and brand names?
Correct answer B. Advertising increases competition, which causes unnecessary bankruptcies and layoffs
When does X-inefficiency occur?
Correct answer B. Costs are higher than they could be due to a lack of competitive pressure
What is true when a monopoly earns abnormal profits?
Correct answer B. The price set is greater than the marginal cost
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Which of the following is NOT a barrier to entry?
Correct answer A. Mobility of resources
Which statement is true of monopoly?
Correct answer D. There is one main seller
Where does a welfare loss occur under monopoly?
Correct answer A. The price is greater than the marginal cost
Which of the following is NOT a barrier to entry in a monopolised market?
Correct answer B. A single firm is very large
When a monopolist produces one more unit, how does the marginal revenue from that unit compare with the price?
Correct answer C. Below the price because the price effect outweighs the output effect
Which statement correctly compares price and marginal cost in competitive and monopolised markets?
Correct answer A. In competitive markets price equals marginal cost; in monopolised markets price exceeds marginal cost
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Why is Thomson the monopoly producer of your textbook?
Correct answer C. Thomson has a legally protected exclusive right to produce this textbook
What is the inefficiency associated with monopoly caused by?
Correct answer C. Underproduction of the good
What is the monopolist’s supply curve?
Correct answer A. Does not exist
What is the purpose of antitrust (competition) laws?
Correct answer B. Increase competition in an industry by preventing mergers and breaking up large firms
Which statement about price discrimination is NOT true?
Correct answer C. Perfect price discrimination generates a deadweight loss