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22508_F25261 Pelones Bernard A: JM_BMEICO
  • 1. In monopolistic competition, firms compete mainly through:
A) Producing identical goods
B) Limiting market entry
C) Non-price competition.
D) Price collusion
  • 2. Producing goods at the lowest possible cost is known as:
A) Marginal analysis
B) Allocative efficiency
C) Price leadership
D) Productive efficiency.
  • 3. In monopolistic competition, decision-making by firms is:
A) Controlled by the government
B) Centralized across firms
C) Coordinated through agreements
D) Independent.
  • 4. A firm's ability to slightly influence the price of its product shows that it has:
A) Market power.
B) Full monopoly
C) No control
D) Perfect elasticity
  • 5. A monopolistically competitive firm has some control over price because:
A) Government approves prices
B) Its product is differentiated.
C) There are few competitors
D) It sets industry standards
  • 6. What allows consumers to easily switch between brands in monopolistic competition?
A) Price rigidity
B) Elastic demand.
C) Government regulation
D) Single product type
  • 7. "Monopolistic competition is a market structure where firms sell products that are:"
A) Regulated by the government
B) Similar but not identical.
C) Perfect substitutes
D) Homogeneous goods
  • 8. Monopolistic competition is a market structure where firms sell products that are:"
A) Similar but not identical.
B) Regulated by the government
C) Perfect substitutes
D) Homogeneous goods
  • 9. Heavy spending on advertising is an example of:
A) Non-price competition.
B) Collusive pricing
C) Pure competition
D) Cost leadership
  • 10. When a company changes packaging and advertising to stand out, it uses:
A) Price discrimination
B) Predatory pricing
C) Product differentiation.
D) Price leadership
  • 11. When resources are used to produce goods that best satisfy consumer preferences, it is called:
A) Allocative efficiency.
B) Technical efficiency
C) Productive efficiency
D) Economic inequality
  • 12. Which statement best defines economic efficiency in monopolistic competition?
A) Producing the most goods regardless of demand
B) Using resources in the best possible way to satisfy consumer needs.
C) Maximizing price to increase firm profit
D) Eliminating all forms of competition
  • 13. The freedom of entry and exit in monopolistic competition ensures:
A) Long-run normal profit.
B) Constant market dominance
C) Barriers to entry
D) Permanent monopoly power
  • 14. Which of the following best describes brand loyalty?
A) Consumers repeatedly buy the same brand despite alternatives.
B) Firms changing prices frequently to attract customers
C) Companies copying competitors' designs
D) Consumers switching to cheaper products easily
  • 15. In the long run, firms in monopolistic competition earn:
A) Negative profit
B) Supernormal profit
C) No revenue
D) Normal profit.
  • 16. The main feature that separates monopolistic competition from perfect competition is:
A) Single seller
B) Government regulation
C) Price control
D) Product differentiation.
  • 17. Which barrier to entry is created when a company owns a vital raw material like diamond mines?
A) Price Discrimination
B) Economies of Scale
C) Rent-Seeking
D) Control of Essential Resources.
  • 18. Which barrier to entry is created when a company owns a vital raw material like diamond mines?
A) Control of Essential Resources.
B) Price Discrimination
C) Economies of Scale
D) Rent-Seeking
  • 19. a monopoly is called a ____ because it has full control over sitting the price of its product
A) Price Taker
B) Competitive
C) Price Maker.
D) Free Rider
  • 20. Consumers pay higher electricity bills because there is only one provider in the market. This represents:
A) Profit Maximization
B) Rent-Seeking
C) Higher Prices.
D) Price Ceiling
  • 21. A company dominates the market because it owns all major water sources in a region. This monopoly is due to:
A) Price Discrimination
B) Control of Essential Resources.
C) Market Equilibrium
D) Technological Superiority
  • 22. Which social cost of monopoly explains why consumers pay more compared to perfect competition?
A) Restricted Output.
B) Higher Prices
C) X-Inefficiency
D) Reduced Consumer Choice
  • 23. A research-based firm spends billions on R&D and secures patents, preventing rivals from duplicating its medicine.This advantage shows:
A) Restricted Output
B) Control of Essential Resources
C) Barriers to Entry through Intellectual Property Rights.
D) Rent-Seeking Behavior
  • 24. When a monopoly has little incentive to minimize costs or innovate, it leads to:
A) Rent-Seeking
B) Price Discrimination
C) Economies of Scale
D) X-Inefficiency.
  • 25. Despite complaints about high prices, a monopoly retains customers because no alternative products exist. The market condition illustrated here is:
A) Perfect Competition
B) Market Equilibrium
C) Price Ceiling
D) Lack of Consumer Choice.
  • 26. When a monopolist sets output where MC = MR, it is practicing what principle?
A) Market Equilibrium
B) Rent-Seeking
C) Profit Maximization.
D) Price Control
  • 27. A mining firm controls most of the world's diamond production, making it the sole major supplier. This is an example of:
A) Profit Maximization
B) Price Ceiling
C) Control of Essential Resources.
D) Rent-Seeking
  • 28. The ratio of fiction to non-fiction books is 3:5. If there are 3,200 books total, how many are non-fiction?

    1200
A) 2000
B) 1200
C) 4000
D) 3500
  • 29. A P80 item is 25% off, then taxed 10% on the sale price.

    What is the total cost?
A) P55
B) P60
C) P66
D) P70
  • 30. A phone is on sale for P450 (90% of original price). What was the original price?
A) P300
B) P550
C) P500
D) P450
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