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Free download in PDF Market Structure Objective Type Questions and Answers for competitive exams. These short objective type questions with answers are very important for Board exams as well as competitive exams. These short solved questions or quizzes are provided by Gkseries.
(21)
Which of the following is a barrier to entry that typically results in monopoly?
[A]
Production of the industry's product requires a large initial capital investment.
[B]
The firm controls the entire supply of a raw material.
[C]
The firm holds an exclusive government franchise.
[D]
Production of the industry's product is subject to economies of scale over a broad range of output.
Answer: Production of the industry's product requires a large initial capital investment.
(22)
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
[A]
P = 4 and Q = 4.
[B]
P = 3 and Q = 6.
[C]
P = 5 and Q = 2.
[D]
P = 6 and Q = 9.
(23)
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]
less than average variable cost.
[B]
greater than average variable cost.
[C]
greater than average total cost.
[D]
less than average total cost.
Answer: less than average variable cost.
(24)
Which of the following markets comes close to satisfying the assumptions of a perfectly competitive market structure?
[A]
The market for petroleum and natural gas.
[B]
The market for agricultural commodities such as wheat or corn.
[C]
The stock market.
[D]
All of the above come close to satisfying the assumptions of perfect competition.
Answer: All of the above come close to satisfying the assumptions of perfect competition.
(25)
If one perfectly competitive firm increases its level of output, market supply
[A]
will increase and market price will fall.
[B]
will increase and market price will rise.
[C]
and market price will both remain constant.
[D]
will decrease and market price will rise.
Answer: and market price will both remain constant.
(26)
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
[A]
a monopolist.
[B]
an oligopolist.
[C]
a perfect competitor.
[D]
a monopolistic competitor.
(27)
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
[A]
a monopolistic competitor.
[B]
a perfect competitor.
[C]
a monopolist.
[D]
an oligopolist.
Answer: a monopolistic competitor.
(28)
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.
(29)
Which of the following best describes a successful monopolist?
[A]
The only seller of a difficult-to-substitute product
[B]
The only buyer of a resource or type of labor
[C]
The only buyer of a consumer product
[D]
The only seller of a non-essential product
Answer: The only seller of a difficult-to-substitute product
(30)
Which of the following is most likely to be observed in a monopolistically competitive market?
[A]
Government antitrust oversight
[B]
Standardized, homogenous products
[C]
Collusion and price-fixing between firms
[D]
Non-price competition, such as advertising
Answer: Non-price competition, such as advertising
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