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22508_F25261 Pelones Bernard A: JM_BMEICO
Contributed by: Gnet
  • 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) Productive efficiency.
B) Price leadership
C) Marginal analysis
D) Allocative efficiency
  • 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) Full monopoly
B) Market power.
C) No control
D) Perfect elasticity
  • 5. A monopolistically competitive firm has some control over price because:
A) Government approves prices
B) Its product is differentiated.
C) It sets industry standards
D) There are few competitors
  • 6. What allows consumers to easily switch between brands in monopolistic competition?
A) Single product type
B) Price rigidity
C) Elastic demand.
D) Government regulation
  • 7. "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
  • 8. Monopolistic competition is a market structure where firms sell products that are:"
A) Perfect substitutes
B) Homogeneous goods
C) Regulated by the government
D) Similar but not identical.
  • 9. Heavy spending on advertising is an example of:
A) Non-price competition.
B) Pure competition
C) Cost leadership
D) Collusive pricing
  • 10. When a company changes packaging and advertising to stand out, it uses:
A) Predatory pricing
B) Price leadership
C) Price discrimination
D) Product differentiation.
  • 11. When resources are used to produce goods that best satisfy consumer preferences, it is called:
A) Allocative efficiency.
B) Productive efficiency
C) Economic inequality
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) Eliminating all forms of competition
C) Maximizing price to increase firm profit
D) Producing the most goods regardless of demand
  • 13. The freedom of entry and exit in monopolistic competition ensures:
A) Long-run normal profit.
B) Constant market dominance
C) Barriers to entry
D) Permanent monopoly power
  • 14. Which of the following best describes brand loyalty?
A) Companies copying competitors' designs
B) Consumers repeatedly buy the same brand despite alternatives.
C) Consumers switching to cheaper products easily
D) Firms changing prices frequently to attract customers
  • 15. In the long run, firms in monopolistic competition earn:
A) Negative profit
B) No revenue
C) Supernormal profit
D) Normal profit.
  • 16. The main feature that separates monopolistic competition from perfect competition is:
A) Government regulation
B) Product differentiation.
C) Single seller
D) Price control
  • 17. Which barrier to entry is created when a company owns a vital raw material like diamond mines?
A) Control of Essential Resources.
B) Rent-Seeking
C) Price Discrimination
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) Price Discrimination
C) Economies of Scale
D) Control of Essential Resources.
  • 19. a monopoly is called a ____ because it has full control over sitting the price of its product
A) Competitive
B) Free Rider
C) Price Taker
D) Price Maker.
  • 20. Consumers pay higher electricity bills because there is only one provider in the market. This represents:
A) Rent-Seeking
B) Price Ceiling
C) Profit Maximization
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) Market Equilibrium
B) Price Discrimination
C) Control of Essential Resources.
D) Technological Superiority
  • 22. Which social cost of monopoly explains why consumers pay more compared to perfect competition?
A) Restricted Output.
B) Reduced Consumer Choice
C) X-Inefficiency
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) Control of Essential Resources
B) Rent-Seeking Behavior
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) Rent-Seeking
B) Economies of Scale
C) X-Inefficiency.
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) Lack of Consumer Choice.
B) Price Ceiling
C) Market Equilibrium
D) Perfect Competition
  • 26. When a monopolist sets output where MC = MR, it is practicing what principle?
A) Market Equilibrium
B) Profit Maximization.
C) Rent-Seeking
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) Price Ceiling
B) Rent-Seeking
C) Profit Maximization
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) 3500
B) 1200
C) 2000
D) 4000
  • 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) P300
C) P450
D) P550
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