Vashti Braynen
Quiz by , created more than 1 year ago

Business/Economics Quiz on Competition & Monopoly , created by Vashti Braynen on 19/04/2021.

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Vashti Braynen
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Vashti Braynen
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Competition & Monopoly

Question 1 of 21

1

Under perfect competition, output is determined by:

Select one of the following:

  • A. Demand and equilibrium price

  • B. Fixed expenses

  • C. Individuals

  • D. Industry supply curve

Explanation

Question 2 of 21

1

Which of the following is NOT a characteristic of a perfectly competitive market?

Select one of the following:

  • A. Free entry and exit

  • B. No substitutes

  • C. Numerous sellers

  • D. Perfect information

Explanation

Question 3 of 21

1

Perfect competition pushes firms to

Select one of the following:

  • A. Efficiency

  • B. Maximum possible output

  • C. Maximum sales

  • D. Take over other firms

Explanation

Question 4 of 21

1

A factor that makes it difficult for firms to enter a market is called...

Select one of the following:

  • A. A barrier to entry

  • B. A block to entry

  • C. An impediment to entry

  • D. An obstacle to entry

Explanation

Question 5 of 21

1

Which is not a requirement for a market to have perfect competition?

Select one of the following:

  • A. Consumers and producers are informed about products

  • B. Diverse buyers and sellers participate in a market

  • C. Sellers can freely enter and exit the market

  • D. Sellers offer the same products

Explanation

Question 6 of 21

1

In a perfectly competitive market, a firm

Select one of the following:

  • A. Can easily take control of the market

  • B. Can influence the price of the good across the market

  • C. Only has control over how much they decide to produce

  • D. Can influence demand across the market through advertising

Explanation

Question 7 of 21

1

Perfect competition is best described as a market with

Select one of the following:

  • A. Few firms producing essentially the same product

  • B. Few firms producing very different products

  • C. Many firms producing essentially the same product

  • D. Many firms producing very different products

Explanation

Question 8 of 21

1

The market demand curve for a perfectly competitive industry is QD = 12 - 2P. The market supply curve is QS = 3 + P. The market will be in equilibrium if

Select one of the following:

  • A. P = 3 and Q = 6

  • B. P = 6 and Q = 9

  • C. P = 5 and Q = 2

  • D. P = 4 and Q = 4

Explanation

Question 9 of 21

1

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

Select one of the following:

  • A. Greater than average total cost

  • B. Less than average total cost

  • C. Greater than average variable cost

  • D. Less than average variable cost

Explanation

Question 10 of 21

1

If the market demand curve for a commodity has a negative slope, then the market structure must be

Select one of the following:

  • A. Perfect competition

  • B. Monopoly

  • C. Imperfect competition

  • D. The market structure cannot be determined from the information given

Explanation

Question 11 of 21

1

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

Select one of the following:

  • A. A monopolist

  • B. A monopolistic competitor

  • C. An oligopolist

  • D. A perfect competitor

Explanation

Question 12 of 21

1

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

Select one of the following:

  • A. A monopolist

  • B. A monopolistic competitor

  • C. An oligopolist

  • D. A perfect competitor

Explanation

Question 13 of 21

1

If a firm sells its output on a market that is characterized by many sellers and buyers, a differentiated product, and unlimited long-run resource mobility, then the firm is

Select one of the following:

  • A. A monopolist

  • B. A monopolistic competitor

  • C. An oligopolist

  • D. A perfect competitor

Explanation

Question 14 of 21

1

If a firm sells its output on a market that is characterized by few sellers and many buyers and limited long-run resource mobility, then the firm is

Select one of the following:

  • A. A monopolist

  • B. A monopolistic competitor

  • C. An oligopolist

  • D. A perfect competitor

Explanation

Question 15 of 21

1

Branding their goods and making the brand name familiar by means of advertising is an example of non-price competition.

Select one of the following:

  • True
  • False

Explanation

Question 16 of 21

1

Monopolies CANNOT be created by law.

Select one of the following:

  • True
  • False

Explanation

Question 17 of 21

1

Legal monopolies tend to consist of nationalised industries.

Select one of the following:

  • True
  • False

Explanation

Question 18 of 21

1

Restrictive trade practices occur when firms in an industry agree to not compete with each other but to restrict the entry of any new firm.

Select one of the following:

  • True
  • False

Explanation

Question 19 of 21

1

The Organization of Petroleum is a form of a cartel.

Select one of the following:

  • True
  • False

Explanation

Question 20 of 21

1

A monopoly is NOT capable of restricting the supply of a product.

Select one of the following:

  • True
  • False

Explanation

Question 21 of 21

1

Large scale production may enable firms to produce at a very low average cost is a barrier to entry.

Select one of the following:

  • True
  • False

Explanation

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