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Home  arrow Student Resources  arrow Chapter 6: Market structures  arrow Multiple choice questions

Multiple choice questions

Try the multiple choice questions below to test your knowledge of this chapter. Once you have completed the test, click on 'Submit Answers for Grading' to get your results.

This activity contains 22 questions.

Question 1.
Perfect competition occurs in a market where there are many firms each selling:

End of Question 1

Question 2.
Which one of the following does NOT occur in perfect competition?

End of Question 2

Question 3.
In perfect competition, a firm's marginal revenue equals its:

End of Question 3

Question 4.
Refer to the Figure below. What price will the monopolist charge in order to maximise profit? Graph for chapter 6, question 4

End of Question 4

Question 5.
Refer to the Figure in question 4. At the profit-maximising price and output, the total revenue is:

End of Question 5

Question 6.
Which three of the following characteristics apply to oligopoly?

End of Question 6

Question 7.
One difference between perfect competition and monopolistic competition is that:

End of Question 7

Question 8.
To achieve more market power, firms can:

End of Question 8

Question 9.
Under which type of market structure is price rigidity (stickiness) often predicted?

End of Question 9

Question 10.
Which two of the following assumptions apply to 'kinked-demand' analysis in oligopoly markets?

End of Question 10

Question 11.
A major threat to longer-term profits exists when barriers to entry into an industry are high.

End of Question 11

Question 12.
Extensive advertising can be a powerful barrier to entry into an industry.

End of Question 12

Question 13.
In a non-zero-sum game, any benefit to one firm must be offset by an equivalent loss to some other firm.

End of Question 13

Question 14.
In the long run, the monopolist can remain in the industry at a price that is just below long-run average costs.

End of Question 14

Question 15.
Under perfect competition the marginal cost curve for the industry is the supply curve for the industry.

End of Question 15

Question 16.
Under monopoly the marginal cost curve for the industry is the supply curve for the industry.

End of Question 16

Question 17.
A maxi-min decision rule means selecting the best of the worst possible outcomes in the pay-off matrix.

End of Question 17

Question 18.
Under kinked demand theory the prices of oligopolists are predicted to be rather rigid or 'sticky'.

End of Question 18

Question 19.
Price discrimination refers to charging different prices for different products in different markets.

End of Question 19

Question 20.
A 'natural monopoly' is said to exist when the minimum efficient size for the firm is a small percentage of industry output.

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Question 21.
Normal profits are more than sufficient to keep the firm in the industry in the long run.

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Question 22.
In the long run, firms under monopoly or oligopoly must only earn normal profits.

End of Question 22

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