Unit 3 - Practice Quiz

1 Which of the following market structures is characterized by a very large number of firms selling a homogeneous product?

2 In a perfectly competitive market, the demand curve facing an individual firm is:

3 The profit maximization condition for a firm in any market structure is:

4 Under perfect competition, what is the relationship between Average Revenue (), Marginal Revenue (), and Price ()?

5 In the short run, a perfectly competitive firm should shut down if:

6 Which market structure is characterized by a single seller selling a unique product with no close substitutes?

7 In a monopoly, the relationship between Price () and Marginal Revenue () is:

8 The Lerner Index of monopoly power is calculated as:

9 Which of the following is a characteristic of Monopolistic Competition?

10 In the long run, firms in Monopolistic Competition earn:

11 The concept of Excess Capacity is associated with which market structure?

12 Which market structure is defined by a few large sellers dominating the industry?

13 The Kinked Demand Curve hypothesis in Oligopoly is used to explain:

14 In the Kinked Demand Curve model, the segment of the demand curve above the current price is:

15 A Cartel (e.g., OPEC) is most likely to form in which market structure?

16 Which pricing strategy involves charging a very high initial price for a new, innovative product and lowering it over time?

17 Third-degree price discrimination occurs when a monopolist charges different prices based on:

18 Allocative efficiency is achieved when:

19 Which market structure achieves both productive and allocative efficiency in the long run?

20 What is the shape of the Total Revenue () curve under Perfect Competition?

21 The deadweight loss in a monopoly arises because:

22 A Natural Monopoly generally arises due to:

23 In Game Theory (Oligopoly), a Nash Equilibrium is reached when:

24 Selling costs (advertising expenses) are most significant in:

25 The supply curve of a monopolist:

26 Which model of oligopoly assumes that firms compete on output (quantity) rather than price?

27 In the long run, the price () in Monopolistic Competition is:

28 The practice of charging a low price to drive competitors out of the market is known as:

29 Under perfect competition, the industry demand curve is:

30 Cross-elasticity of demand for the product of a monopolist is:

31 Which of the following is NOT a barrier to entry?

32 In the Bertrand model of oligopoly, firms compete by setting:

33 What is Penetration Pricing?

34 Under which market structure is the firm a 'Price Maker'?

35 If a monopolist engages in First-Degree Price Discrimination, the Consumer Surplus will be:

36 Barometric Price Leadership occurs when:

37 The break-even point for a firm occurs when:

38 Which curve cuts the Average Cost (AC) curve at its minimum point?

39 In the Prisoner's Dilemma matrix commonly applied to Oligopolies, the dominant strategy for both firms usually leads to:

40 Peak-load pricing is a strategy often used by:

41 If the demand curve is linear and downward sloping, at the midpoint of the curve, the price elasticity of demand is:

42 Monopsony is a market condition where there is:

43 The assumption of 'Product Homogeneity' implies that:

44 In a Sweezy Oligopoly model (Kinked Demand), the Marginal Revenue curve has a:

45 Cost-Plus Pricing (Mark-up Pricing) is determined by:

46 Which of the following creates a Deadweight Loss?

47 Interdependence between firms is the hallmark of:

48 If a perfect competitor increases their price above the market price, their Total Revenue will:

49 Two-part tariff pricing involves:

50 In the long run, the supply curve for a Constant Cost Industry in perfect competition is: