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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) Limiting market entry
D) Non-price competition.
  • 2. Producing goods at the lowest possible cost is known as:
A) Marginal analysis
B) Productive efficiency.
C) Price leadership
D) Allocative efficiency
  • 3. In monopolistic competition, decision-making by firms is:
A) Independent.
B) Centralized across firms
C) Controlled by the government
D) Coordinated through agreements
  • 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) Its product is differentiated.
B) It sets industry standards
C) There are few competitors
D) Government approves prices
  • 6. What allows consumers to easily switch between brands in monopolistic competition?
A) Single product type
B) Government regulation
C) Price rigidity
D) Elastic demand.
  • 7. "Monopolistic competition is a market structure where firms sell products that are:"
A) Perfect substitutes
B) Regulated by the government
C) Similar but not identical.
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) Collusive pricing
B) Pure competition
C) Cost leadership
D) Non-price competition.
  • 10. When a company changes packaging and advertising to stand out, it uses:
A) Price discrimination
B) Price leadership
C) Predatory pricing
D) Product differentiation.
  • 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) Eliminating all forms of competition
B) Producing the most goods regardless of demand
C) Maximizing price to increase firm profit
D) Using resources in the best possible way to satisfy consumer needs.
  • 13. The freedom of entry and exit in monopolistic competition ensures:
A) Long-run normal profit.
B) Constant market dominance
C) Permanent monopoly power
D) Barriers to entry
  • 14. Which of the following best describes brand loyalty?
A) Consumers switching to cheaper products easily
B) Consumers repeatedly buy the same brand despite alternatives.
C) Companies copying competitors' designs
D) Firms changing prices frequently to attract customers
  • 15. In the long run, firms in monopolistic competition earn:
A) Normal profit.
B) No revenue
C) Supernormal profit
D) Negative 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) Economies of Scale
B) Price Discrimination
C) Control of Essential Resources.
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 Maker.
B) Competitive
C) Free Rider
D) Price Taker
  • 20. Consumers pay higher electricity bills because there is only one provider in the market. This represents:
A) Higher Prices.
B) Rent-Seeking
C) Price Ceiling
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) Control of Essential Resources.
B) Price Discrimination
C) Technological Superiority
D) Market Equilibrium
  • 22. Which social cost of monopoly explains why consumers pay more compared to perfect competition?
A) X-Inefficiency
B) Restricted Output.
C) Reduced Consumer Choice
D) Higher Prices
  • 23. A research-based firm spends billions on R&D and secures patents, preventing rivals from duplicating its medicine.This advantage shows:
A) Barriers to Entry through Intellectual Property Rights.
B) Restricted Output
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) X-Inefficiency.
B) Economies of Scale
C) Price Discrimination
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) 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) Price Control
B) Market Equilibrium
C) Profit Maximization.
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) Profit Maximization
B) Control of Essential Resources.
C) Rent-Seeking
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) 4000
B) 1200
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) P60
D) P55
  • 30. A phone is on sale for P450 (90% of original price). What was the original price?
A) P300
B) P500
C) P550
D) P450
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