In which of the following oligopoly model prices will tend to be very rigid?

• A) kinked demand curve
• B) Stackelberg
• C) Bertrand
• D) Cournot

Suppose a firm is operating in oligopolistic market structure. The demand curve for its products is:

• A) Downward sloping.
• B) Horizontal.
• C) Perfectly elastic.
• D) Perfectly Inelastic.

Which of the following statements is TRUE about allocative efficiency?

• A) Marginal revenue is equal to average revenue
• B) Marginal revenue is greater than marginal cost
• C) Marginal revenue is equal to marginal cost
• D) Marginal cost is equal to average cost

Famous concept “Government has a role in maintaining full employment” is given by:

• A) J.B. Say.
• B) J.M. Keynes.
• C) Adam Smith.
• D) David Ricardo.

In the kinked demand curve model, if one firm reduces its price then other firms will:

• A) Raise their price.
• B) Not change their price.
• C) Compete on a non-price basis.
• D) Reduce their price.

What characterizes information products in economics?

• A) They are produced by traditional manufacturing processes.
• B) They are intangible and non-rivalrous in consumption.
• C) They have physical attributes.
• D) They are always excludable.

Monopolist earns supernormal profit and can invest their supernormal profits in:

• A) All of the given options are true
• B) Sustain a price war into new foreign market
• C) Development of new innovative products
• D) Research and development

A monopolistic competitive industry is in equilibrium in the long run at the point where:

• A) Demand curve is tangent to marginal cost curve
• B) Marginal cost curve is tangent to average cost curve
• C) Demand curve is tangent to marginal revenue curve
• D) Demand curve is tangent to average cost curve

What could be a barrier to entry for potential competitors in a natural monopoly?

• A) Diseconomies of scale
• B) Large initial fixed costs
• C) Low initial fixed costs
• D) Small market size

Which of the following is a key feature that distinguishes monopolistic competition from perfect competition?

• A) The homogeneity of products
• B) The number of firms in the market
• C) The level of government intervention
• D) The absence of barriers to entry

Which of the following can occur at long run market equilibrium according to Keynes school of thought?

• A) All factors of production must be fully employed.
• B) People are not unemployed involuntarily.
• C) All of the given options are correct.
• D) Factors of production can be unemployed.

Which of the following markets is most likely to be oligopolistic?

• A) The market for clothing.
• B) The market for aluminum.
• C) The market for wheat.
• D) The market for vegetables.

Suppose a monopolist is earning supernormal profit in the short run. In the long run, it will make:

• A) Normal loss
• B) Maximum loss
• C) Normal profit
• D) Supernormal profit

Which of the following market structures is involved in non-price-competition?

• A) Perfect competition and oligopoly
• B) Monopolistic competition
• C) Perfect competition
• D) Monopoly

Which of the following point is achieved, if price is equal to marginal cost?

• A) Productive inefficiency
• B) Allocative inefficiency
• C) Productive efficiency
• D) Allocative efficiency

The market structure in which strategic considerations are most important is:

• A) Monopolistic competition.
• B) Perfect competition.
• C) Monopoly.
• D) Oligopoly.

A firm will maximize its profits through price discrimination when the price elasticity of demand for different customers is:

• A) Different
• B) Zero
• C) Same
• D) Infinite

Monopolistic competition is characterized by:

• A) Identical products and a single seller
• B) Differentiated products and a single seller
• C) Identical products and many sellers
• D) Differentiated products and many sellers

Which of the followings is true for Say’s law in case of excess supply of labor?

• A) Consumer demand will decrease
• B) Demand for factors will decrease
• C) Firms will decrease output
• D) Wage rate will decrease

The concept that “Demand creates its own supply" is given by:

• A) Monetarists
• B) Keynesians
• C) Classical
• D) New Classical