MARKET STRUCTURE : MONOPOLY & PERFECT COMPETITION

Profit are maximize when                               .

 

• A.       Costs are minimized

• B.        Revenue is maximized

• C.       Marginal cost equals marginal revenue

• D.       The average cost is less than the average revenue

Firm in this types of market structure have no influence over the market price. This is                .

 

 

• A.       Perfect competition

• B.        Monopolistic competition

• C.       Oligopoly

• D.       Monopoly

  In perfect competition,                   .

 

• A. there are few buyers

• B. there are significant restrictions on entry

• C. each firm can influence the price of the good

• D. all firms in the market sell their products at the same price

A perfectly elastic demand curve is a characteristics of                 .

 

• A. an oligopoly

• B. a monopoly

• C. a perfect competition

• D. a monopolistic competition

     If a purely competitive firm is confronted with an equilibrium price of RM5.00, its marginal revenue          .

 

• A. May be either greater or lesser than RM5.00.

• B.Will also be RM5.00

• C.Will be lesser than RM5.00.

• D.Will be greater than RM5.00.

A perfectly competitive firm will shut down its operations if                .

 

• A. price equals average costs

• B. price is less than average costs

• C. price is less than average variable costs

• D. price is more than average variable costs

Which of the following perfectly competitive firm is in long-run equilibrium?

 

• A. firms in the industry are earning a normal profit

• B. firms in the industry are earning a supernormal profit

• C. firms in the industry are earning a subnormal profit

• D. price and long-run average cost are equal to each other

Comparing a monopoly and a competitive market, the monopolist will                    .

 

• A.       Produce less at a lower price

• B.        Produce more at a lower price

• C.       Produce less at a higher price

• D.       Produce more at a higher price

At the profit maximizing output for a monopolist, marginal revenue                 .

 

• A.                    equal marginal cost

• B.            exceeds marginal cost

• C.                    equals marginal revenue

• D.                    exceeds average total cost

A monopolist face a downward sloping demand curve because                           .

 

• A.       It sells a product with many close substitutes

• B.        It must lower the price in order to sell more output

• C.       It must raise the price in order to sell more output

• D.       It can sell the output it desires at the market-determined price