Question:

In monopolistic competition in long run equilibrium, the price will be equal to:

A.

the marginal cost

B.

marginal revenue

C.

average variable cost

D.

average total cost

Answer» d. average total cost

Question:

Supernormal profit refers to

A.

High proportion of net profit

B.

Minimum necessary profit to induce an entrepreneur to remain in business

C.

Unexpectedly high Profit

D.

Residual surplus

Answer» a. High proportion of net profit

Question:

The short run equilibrium level of output of the monopolisticcompetitor is given by

A.

Price = MC

B.

Price= AC

C.

MC=MR

D.

P=MR

Answer» c. MC=MR

Question:

‘ The Economics of Imperfect Competition’ is written by;

A.

J.Robinson

B.

J.M. Keynes

C.

Adam Smith

D.

E. Chamberlin

Answer» a. J.Robinson

Question:

Price discrimination under monopoly is of

A.

One

B.

Two

C.

Three

D.

Four

Answer» c. Three

Question:

Monopsony is a market with

A.

one buyer

B.

one seller

C.

many buyers

D.

one buyer and one seller

Answer» a. one buyer

Question:

A multiplant monopolist maximizes his profit at the point where:

A.

MR = MC1

B.

MR = MC2

C.

MR1 = MR2

D.

MR = MC1 = MC2

Answer» d. MR = MC1 = MC2

Question:

The price paid for any factor of production tends to be equal to:

A.

the wage rate

B.

the value of the marginal product of that input

C.

the price of the product sold by the firm that inputs

D.

the price of the product sold by the firm that buys the inputs

Answer» b. the value of the marginal product of that input

Question:

A ___________occurs in an industry where there is only one producer of a good and onlyone supplier.

A.

bilateral monopoly

B.

monopoly

C.

monopsony

D.

duopoly

Answer» a. bilateral monopoly

Question:

‘Homogenous products’ is a characteristic of:

A.

Perfect competition only

B.

Perfect oligopoly only

C.

Both (a) and (b)

D.

None of the above

Answer» c. Both (a) and (b)