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 
(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
7 thoughts on “Economics Objective Questions – Chapter 4 – Market”
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