Explore topic-wise MCQs in Economics Mcqs.

This section includes 58 Mcqs, each offering curated multiple-choice questions to sharpen your Economics Mcqs knowledge and support exam preparation. Choose a topic below to get started.

51.

A firm in a monopolistically competitive industry ?
A. sells a fixed amount of output regardless of price.
B. must raise price to sell more output
C. can sell an infinite amount of output at the market-determined price
D. must lower price to sell more output.
Answer» E.
Discussion
52.

If a firm has some degree of market power, then output price ?
A. no longer influences the amount demand of the firm’s product
B. becomes a decision variable for the firm
C. is guaranteed to be above a firm’s average cost.
D. is determined by the actions of other firms in the industry
Answer» C. is guaranteed to be above a firm’s average cost.
Discussion
53.

Market power is ?
A. a firm’s ability to monopolies a market completely.
B. a firm’s ability to raise price without losing all demand for its product
C. a firm’s ability to sell any amount of output it desires at the market-determined price.
D. a firm’s ability to charge any price it likes
Answer» C. a firm’s ability to sell any amount of output it desires at the market-determined price.
Discussion
54.

Profit-maximizing firms want to maximize the difference between ?
A. marginal revenue and marginal cost.
B. total revenue and total cost
C. total revenue and marginal cost
D. marginal revenue and average cost
Answer» C. total revenue and marginal cost
Discussion
55.

Which of the following is most likely to be a variable cost for a firm ?
A. The franchiser’s fee that a restaurant must pay to the national restaurant chain
B. The payroll taxes that are paid on employee wages.
C. The monthly rent on office space that it leased for a year
D. The interest payments made on loans.
Answer» C. The monthly rent on office space that it leased for a year
Discussion
56.

An industry that has a relatively small number of firms that dominate the market is called ?
A. a colluding industry
B. a merged industry
C. a concentrated industry
D. a natural monopoly
Answer» D. a natural monopoly
Discussion
57.

A form of industry structure characterized by a few firms, each large enough to influence market price is ?
A. perfect competition
B. monopolistic competition
C. oligopoly
D. monopoly
Answer» D. monopoly
Discussion
58.

Which of the following statements best describes the outcome under monopolistic competition ?
A. It is efficient because the right amount of output is produced, but not efficient in that the output produced is produced at a cost above minimum aver
B. It is efficient because entry is free and economic profits are eliminated in the long run.
C. It is not efficient because too little output is produced and the output that is produced is produced at a cost above minimum average total cost
D. It is not efficient because too little output is produced but is efficient in that the output produced is produced at minimum average total cost.
Answer» D. It is not efficient because too little output is produced but is efficient in that the output produced is produced at minimum average total cost.
Discussion