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22508_F25261 Pelones Bernard A: JM_BMEICO
  • 1. In monopolistic competition, firms compete mainly through:
A) Non-price competition.
B) Price collusion
C) Producing identical goods
D) Limiting market entry
  • 2. Producing goods at the lowest possible cost is known as:
A) Marginal analysis
B) Productive efficiency.
C) Allocative efficiency
D) Price leadership
  • 3. In monopolistic competition, decision-making by firms is:
A) Independent.
B) Controlled by the government
C) Centralized across firms
D) Coordinated through agreements
  • 4. A firm's ability to slightly influence the price of its product shows that it has:
A) Full monopoly
B) No control
C) Perfect elasticity
D) Market power.
  • 5. A monopolistically competitive firm has some control over price because:
A) It sets industry standards
B) There are few competitors
C) Its product is differentiated.
D) Government approves prices
  • 6. What allows consumers to easily switch between brands in monopolistic competition?
A) Single product type
B) Government regulation
C) Elastic demand.
D) Price rigidity
  • 7. "Monopolistic competition is a market structure where firms sell products that are:"
A) Similar but not identical.
B) Homogeneous goods
C) Perfect substitutes
D) Regulated by the government
  • 8. Monopolistic competition is a market structure where firms sell products that are:"
A) Regulated by the government
B) Similar but not identical.
C) Homogeneous goods
D) Perfect substitutes
  • 9. Heavy spending on advertising is an example of:
A) Collusive pricing
B) Non-price competition.
C) Pure competition
D) Cost leadership
  • 10. When a company changes packaging and advertising to stand out, it uses:
A) Product differentiation.
B) Price leadership
C) Price discrimination
D) Predatory pricing
  • 11. When resources are used to produce goods that best satisfy consumer preferences, it is called:
A) Productive efficiency
B) Economic inequality
C) Allocative efficiency.
D) Technical efficiency
  • 12. Which statement best defines economic efficiency in monopolistic competition?
A) Using resources in the best possible way to satisfy consumer needs.
B) Maximizing price to increase firm profit
C) Eliminating all forms of competition
D) Producing the most goods regardless of demand
  • 13. The freedom of entry and exit in monopolistic competition ensures:
A) Constant market dominance
B) Long-run normal profit.
C) Permanent monopoly power
D) Barriers to entry
  • 14. Which of the following best describes brand loyalty?
A) Firms changing prices frequently to attract customers
B) Companies copying competitors' designs
C) Consumers switching to cheaper products easily
D) Consumers repeatedly buy the same brand despite alternatives.
  • 15. In the long run, firms in monopolistic competition earn:
A) No revenue
B) Supernormal profit
C) Negative profit
D) Normal profit.
  • 16. The main feature that separates monopolistic competition from perfect competition is:
A) Single seller
B) Product differentiation.
C) Government regulation
D) Price control
  • 17. Which barrier to entry is created when a company owns a vital raw material like diamond mines?
A) Price Discrimination
B) Control of Essential Resources.
C) Rent-Seeking
D) Economies of Scale
  • 18. Which barrier to entry is created when a company owns a vital raw material like diamond mines?
A) Rent-Seeking
B) Economies of Scale
C) Price Discrimination
D) Control of Essential Resources.
  • 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) Price Ceiling
C) Rent-Seeking
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) Technological Superiority
B) Control of Essential Resources.
C) Market Equilibrium
D) Price Discrimination
  • 22. Which social cost of monopoly explains why consumers pay more compared to perfect competition?
A) Reduced Consumer Choice
B) Higher Prices
C) X-Inefficiency
D) Restricted Output.
  • 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) Barriers to Entry through Intellectual Property Rights.
D) Restricted Output
  • 24. When a monopoly has little incentive to minimize costs or innovate, it leads to:
A) Economies of Scale
B) X-Inefficiency.
C) Rent-Seeking
D) Price Discrimination
  • 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) Price Ceiling
C) Perfect Competition
D) Lack of Consumer Choice.
  • 26. When a monopolist sets output where MC = MR, it is practicing what principle?
A) Market Equilibrium
B) Price Control
C) Rent-Seeking
D) Profit Maximization.
  • 27. A mining firm controls most of the world's diamond production, making it the sole major supplier. This is an example of:
A) Price Ceiling
B) Profit Maximization
C) Rent-Seeking
D) Control of Essential Resources.
  • 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) 1200
B) 2000
C) 4000
D) 3500
  • 29. A P80 item is 25% off, then taxed 10% on the sale price.

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