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22508_F25261 Pelones Bernard A: JM_BMEICO
  • 1. In monopolistic competition, firms compete mainly through:
A) Producing identical goods
B) Price collusion
C) Non-price competition.
D) Limiting market entry
  • 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) Coordinated through agreements
B) Controlled by the government
C) Centralized across firms
D) Independent.
  • 4. A firm's ability to slightly influence the price of its product shows that it has:
A) Market power.
B) No control
C) Full monopoly
D) Perfect elasticity
  • 5. A monopolistically competitive firm has some control over price because:
A) There are few competitors
B) Its product is differentiated.
C) It sets industry standards
D) Government approves prices
  • 6. What allows consumers to easily switch between brands in monopolistic competition?
A) Elastic demand.
B) Single product type
C) Price rigidity
D) Government regulation
  • 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) Homogeneous goods
B) Similar but not identical.
C) Regulated by the government
D) Perfect substitutes
  • 9. Heavy spending on advertising is an example of:
A) Collusive pricing
B) Pure competition
C) Non-price competition.
D) Cost leadership
  • 10. When a company changes packaging and advertising to stand out, it uses:
A) Product differentiation.
B) Predatory pricing
C) Price leadership
D) Price discrimination
  • 11. When resources are used to produce goods that best satisfy consumer preferences, it is called:
A) Technical efficiency
B) Economic inequality
C) Productive efficiency
D) Allocative efficiency.
  • 12. Which statement best defines economic efficiency in monopolistic competition?
A) Eliminating all forms of competition
B) Using resources in the best possible way to satisfy consumer needs.
C) Producing the most goods regardless of demand
D) Maximizing price to increase firm profit
  • 13. The freedom of entry and exit in monopolistic competition ensures:
A) Constant market dominance
B) Permanent monopoly power
C) Long-run normal profit.
D) Barriers to entry
  • 14. Which of the following best describes brand loyalty?
A) Consumers repeatedly buy the same brand despite alternatives.
B) Companies copying competitors' designs
C) Firms changing prices frequently to attract customers
D) Consumers switching to cheaper products easily
  • 15. In the long run, firms in monopolistic competition earn:
A) Supernormal profit
B) No revenue
C) Negative profit
D) Normal profit.
  • 16. The main feature that separates monopolistic competition from perfect competition is:
A) Price control
B) Product differentiation.
C) Government regulation
D) Single seller
  • 17. Which barrier to entry is created when a company owns a vital raw material like diamond mines?
A) Economies of Scale
B) Rent-Seeking
C) Price Discrimination
D) Control of Essential Resources.
  • 18. Which barrier to entry is created when a company owns a vital raw material like diamond mines?
A) Economies of Scale
B) Control of Essential Resources.
C) Rent-Seeking
D) Price Discrimination
  • 19. a monopoly is called a ____ because it has full control over sitting the price of its product
A) Price Maker.
B) Price Taker
C) Competitive
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) Price Ceiling
D) Higher Prices.
  • 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) Market Equilibrium
C) Technological Superiority
D) Control of Essential Resources.
  • 22. Which social cost of monopoly explains why consumers pay more compared to perfect competition?
A) Restricted Output.
B) Reduced Consumer Choice
C) Higher Prices
D) X-Inefficiency
  • 23. A research-based firm spends billions on R&D and secures patents, preventing rivals from duplicating its medicine.This advantage shows:
A) Rent-Seeking Behavior
B) Control of Essential Resources
C) Restricted Output
D) Barriers to Entry through Intellectual Property Rights.
  • 24. When a monopoly has little incentive to minimize costs or innovate, it leads to:
A) Economies of Scale
B) Price Discrimination
C) Rent-Seeking
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) Market Equilibrium
B) Perfect Competition
C) Price Ceiling
D) Lack of Consumer Choice.
  • 26. When a monopolist sets output where MC = MR, it is practicing what principle?
A) Rent-Seeking
B) Profit Maximization.
C) Market Equilibrium
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) Rent-Seeking
C) Control of Essential Resources.
D) Price Ceiling
  • 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) 3500
D) 4000
  • 29. A P80 item is 25% off, then taxed 10% on the sale price.

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