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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) Price collusion
D) Non-price competition.
  • 2. Producing goods at the lowest possible cost is known as:
A) Productive efficiency.
B) Allocative efficiency
C) Marginal analysis
D) Price leadership
  • 3. In monopolistic competition, decision-making by firms is:
A) Coordinated through agreements
B) Centralized across firms
C) Independent.
D) Controlled by the government
  • 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) Its product is differentiated.
B) Government approves prices
C) There are few competitors
D) It sets industry standards
  • 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) Homogeneous goods
D) Perfect substitutes
  • 8. Monopolistic competition is a market structure where firms sell products that are:"
A) Perfect substitutes
B) Similar but not identical.
C) Homogeneous goods
D) Regulated by the government
  • 9. Heavy spending on advertising is an example of:
A) Cost leadership
B) Collusive pricing
C) Pure competition
D) Non-price competition.
  • 10. When a company changes packaging and advertising to stand out, it uses:
A) Price leadership
B) Product differentiation.
C) Predatory pricing
D) Price discrimination
  • 11. When resources are used to produce goods that best satisfy consumer preferences, it is called:
A) Economic inequality
B) Productive efficiency
C) Technical efficiency
D) Allocative 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) Eliminating all forms of competition
D) Using resources in the best possible way to satisfy consumer needs.
  • 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) 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) Supernormal profit
C) No revenue
D) Normal profit.
  • 16. The main feature that separates monopolistic competition from perfect competition is:
A) Single seller
B) Price control
C) Product differentiation.
D) Government regulation
  • 17. Which barrier to entry is created when a company owns a vital raw material like diamond mines?
A) Control of Essential Resources.
B) Economies of Scale
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) Control of Essential Resources.
B) Price Discrimination
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) Profit Maximization
D) Rent-Seeking
  • 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) Market Equilibrium
C) Price Discrimination
D) Control of Essential Resources.
  • 22. Which social cost of monopoly explains why consumers pay more compared to perfect competition?
A) Higher Prices
B) X-Inefficiency
C) Reduced Consumer Choice
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) Restricted Output
B) Barriers to Entry through Intellectual Property Rights.
C) Control of Essential Resources
D) Rent-Seeking Behavior
  • 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) Perfect Competition
C) Lack of Consumer Choice.
D) Market Equilibrium
  • 26. When a monopolist sets output where MC = MR, it is practicing what principle?
A) Profit Maximization.
B) Price Control
C) Market Equilibrium
D) Rent-Seeking
  • 27. A mining firm controls most of the world's diamond production, making it the sole major supplier. This is an example of:
A) Rent-Seeking
B) Control of Essential Resources.
C) Price Ceiling
D) Profit Maximization
  • 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) P60
B) P70
C) P55
D) P66
  • 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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