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22508_F25261 Pelones Bernard A: JM_BMEICO
Contributed by: Gnet
  • 1. In monopolistic competition, firms compete mainly through:
A) Price collusion
B) Producing identical goods
C) Non-price competition.
D) Limiting market entry
  • 2. Producing goods at the lowest possible cost is known as:
A) Price leadership
B) Marginal analysis
C) Allocative efficiency
D) Productive efficiency.
  • 3. In monopolistic competition, decision-making by firms is:
A) Controlled by the government
B) Coordinated through agreements
C) Independent.
D) Centralized across firms
  • 4. A firm's ability to slightly influence the price of its product shows that it has:
A) No control
B) Perfect elasticity
C) Full monopoly
D) Market power.
  • 5. A monopolistically competitive firm has some control over price because:
A) It sets industry standards
B) Its product is differentiated.
C) There are few competitors
D) Government approves prices
  • 6. What allows consumers to easily switch between brands in monopolistic competition?
A) Government regulation
B) Single product type
C) Price rigidity
D) Elastic demand.
  • 7. "Monopolistic competition is a market structure where firms sell products that are:"
A) Perfect substitutes
B) Similar but not identical.
C) Regulated by the government
D) Homogeneous goods
  • 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) Pure competition
B) Cost leadership
C) Collusive pricing
D) Non-price competition.
  • 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) Technical efficiency
B) Productive efficiency
C) Allocative efficiency.
D) Economic inequality
  • 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) Producing the most goods regardless of demand
D) Eliminating all forms of competition
  • 13. The freedom of entry and exit in monopolistic competition ensures:
A) Permanent monopoly power
B) Constant market dominance
C) Barriers to entry
D) Long-run normal profit.
  • 14. Which of the following best describes brand loyalty?
A) Consumers repeatedly buy the same brand despite alternatives.
B) Firms changing prices frequently to attract customers
C) Companies copying competitors' designs
D) Consumers switching to cheaper products easily
  • 15. In the long run, firms in monopolistic competition earn:
A) Supernormal profit
B) No revenue
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) Rent-Seeking
C) Economies of Scale
D) Control of Essential Resources.
  • 18. Which barrier to entry is created when a company owns a vital raw material like diamond mines?
A) Price Discrimination
B) Economies of Scale
C) Rent-Seeking
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) Price Taker
C) Free Rider
D) Price Maker.
  • 20. Consumers pay higher electricity bills because there is only one provider in the market. This represents:
A) Higher Prices.
B) Price Ceiling
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) Control of Essential Resources.
B) Technological Superiority
C) Price Discrimination
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) 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) Price Discrimination
B) Economies of Scale
C) Rent-Seeking
D) X-Inefficiency.
  • 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) Price Control
B) Rent-Seeking
C) Market Equilibrium
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) Control of Essential Resources.
B) Price Ceiling
C) Profit Maximization
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) 3500
C) 4000
D) 2000
  • 29. A P80 item is 25% off, then taxed 10% on the sale price.

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