Economics Objective Questions – Chapter 4 – Market

Economics Objective Questions, which are covered in this chapter, relate to the topic, Market. Economics Objective Questions Test contains 16 questions. Answers to Economics Objective Questions are available after clicking on the answer.

1.Which of the following is not an essential condition of pure competition?

(a) Large number of buyers and sellers

(b) Homogeneous product

(c) Freedom of entry

(d) Absence of transport cost

Answer

Answer: (d) Absence of transport cost


 

2.Under which of the following forms of market structure does a firm has no control over the price of its product:

(a) Monopoly

(b) Oligopoly

(c) Monopolistic competition

(d) Perfect competition

Answer

Answer: (d) Perfect competition


 

3.Given the relation MR=P(1-\cfrac { 1 }{ e } ) if e > 1, then :

(a)    MR > 0

(b)    MR < 0

(c)     MR = 0

(d)    None

Answer

Answer: (a)    MR > 0





4.Profits of the firm will be more at:

(a) MR = MC

(b) Additional revenue from extra unit equals its additional cost

(c) Both of above

(d) None

Answer

Answer: (c) Both of above


 

5.What should a firm do when Marginal revenue is greater than marginal cost?

(a) Firm should expand output

(b) Effect should be made to make them equal

(c) Prices should be covered down

(d) All of these

Answer

Answer: (A) Firm should expand output


 

6.Under monopoly price discrimination depends upon:

(a) Elasticity of demand for commodity

(b) Elasticity of supply for commodity

(c) Size of market

(d) All of above

Answer

Answer: (A) Elasticity of demand for commodity


 

7.Firms in a monopolistic market are price _______:

(a) Takers

(b) Givers

(c) Makers

(d) Acceptors

Answer

Answer: (c) Makers


 

8.Market which have two firms are known as:

(a) Oligopoly

(b) Duopoly

(c) Monopsony

(d) Oligopsony

Answer

Answer: (b) Duopoly


 

Economics Objective Questions – Chapter 4 – Market

9.Monopolist can determine:

(a) Price

(b) Output

(c) Either price or output

(d) None

Answer

Answer: (c) Either price or output


 

10.MR of nth unit is given by:

(a) TRn/TRn – 1

(b) TRn + TRn – 1

(c) TRn – TRn – 1

(d) All of these

Answer

Answer: (c) TRn – TRn – 1


 

11.The market structure in which the number of sellers is small and there is inter dependence in decision making by the firms is known as:

(a) Perfect competition

(b) Oligopoly

(c) Monopoly

(d) Monopolistic competition

Answer

Answer: (b) Oligopoly





12.In perfect competition, since the firm is a price taker, the _______ curve is a straight line:

(a) Marginal cost

(b) Total cost

(c) Total revenue

(d) Marginal revenue

Answer

Answer: (d) Marginal Revenue


 

13.Given the relation MR = P (1 – 1/e), if e < 1, then

(a) MR < 0

(b) MR > 0

(c) MR = 0

(d) None of these.

Answer

Answer: (a) MR < 0


 

14.For a discriminating monopolist the condition for equilibrium is :

(a) MR > MC

(b) MR1 = MR2

(c) MRa = MRb = MC

(d) All of the above.

Answer

Answer: (c) MRa = MRb = MC


 

15.Average revenue curve is also known as:

(a) Profit curve

(b) Demand curve

(c) Supply curve

(d) Average cost curve.

Answer

Answer: (b) Demand curve


 

16.Given, AR = 5 and Elasticity of demand = 2 Find MR.

(a) +2.5

(b) -2.5

(c) +1.5

(d) +2.0

Answer

Answer: (a) +2.5


 

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