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22508_F25261 Pelones Bernard A: JM_BMEICO
  • 1. In monopolistic competition, firms compete mainly through:
A) Producing identical goods
B) Non-price competition.
C) Limiting market entry
D) Price collusion
  • 2. Producing goods at the lowest possible cost is known as:
A) Allocative efficiency
B) Marginal analysis
C) Productive efficiency.
D) Price leadership
  • 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) Perfect elasticity
C) Full monopoly
D) No control
  • 5. A monopolistically competitive firm has some control over price because:
A) Government approves prices
B) It sets industry standards
C) Its product is differentiated.
D) There are few competitors
  • 6. What allows consumers to easily switch between brands in monopolistic competition?
A) Price rigidity
B) Single product type
C) Government regulation
D) Elastic demand.
  • 7. "Monopolistic competition is a market structure where firms sell products that are:"
A) Similar but not identical.
B) Homogeneous goods
C) Regulated by the government
D) Perfect substitutes
  • 8. Monopolistic competition is a market structure where firms sell products that are:"
A) Similar but not identical.
B) Perfect substitutes
C) Homogeneous goods
D) Regulated by the government
  • 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) Product differentiation.
B) Predatory pricing
C) Price discrimination
D) Price leadership
  • 11. When resources are used to produce goods that best satisfy consumer preferences, it is called:
A) Economic inequality
B) Allocative efficiency.
C) Technical efficiency
D) Productive efficiency
  • 12. Which statement best defines economic efficiency in monopolistic competition?
A) Producing the most goods regardless of demand
B) Maximizing price to increase firm profit
C) Using resources in the best possible way to satisfy consumer needs.
D) Eliminating all forms of competition
  • 13. The freedom of entry and exit in monopolistic competition ensures:
A) Constant market dominance
B) Barriers to entry
C) Permanent monopoly power
D) Long-run normal profit.
  • 14. Which of the following best describes brand loyalty?
A) Firms changing prices frequently to attract customers
B) Consumers switching to cheaper products easily
C) Companies copying competitors' designs
D) Consumers repeatedly buy the same brand despite alternatives.
  • 15. In the long run, firms in monopolistic competition earn:
A) Negative profit
B) Normal profit.
C) No revenue
D) Supernormal profit
  • 16. The main feature that separates monopolistic competition from perfect competition is:
A) Government regulation
B) Single seller
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) Economies of Scale
B) Control of Essential Resources.
C) Price Discrimination
D) Rent-Seeking
  • 18. 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
  • 19. a monopoly is called a ____ because it has full control over sitting the price of its product
A) Price Taker
B) Price Maker.
C) Competitive
D) Free Rider
  • 20. Consumers pay higher electricity bills because there is only one provider in the market. This represents:
A) Price Ceiling
B) Higher Prices.
C) Rent-Seeking
D) Profit Maximization
  • 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) Technological Superiority
C) Market Equilibrium
D) Control of Essential Resources.
  • 22. Which social cost of monopoly explains why consumers pay more compared to perfect competition?
A) Higher Prices
B) Restricted Output.
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) Rent-Seeking Behavior
B) Restricted Output
C) Control of Essential Resources
D) Barriers to Entry through Intellectual Property Rights.
  • 24. When a monopoly has little incentive to minimize costs or innovate, it leads to:
A) Price Discrimination
B) Economies of Scale
C) X-Inefficiency.
D) Rent-Seeking
  • 25. Despite complaints about high prices, a monopoly retains customers because no alternative products exist. The market condition illustrated here is:
A) Price Ceiling
B) Lack of Consumer Choice.
C) Market Equilibrium
D) Perfect Competition
  • 26. When a monopolist sets output where MC = MR, it is practicing what principle?
A) Rent-Seeking
B) Price Control
C) Profit Maximization.
D) Market Equilibrium
  • 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) 1200
B) 4000
C) 3500
D) 2000
  • 29. A P80 item is 25% off, then taxed 10% on the sale price.

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