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22508_F25261 Pelones Bernard A: JM_BMEICO
Contributed by: Gnet
  • 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) Productive efficiency.
B) Allocative efficiency
C) Price leadership
D) Marginal analysis
  • 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) Perfect elasticity
B) Market power.
C) No control
D) Full monopoly
  • 5. A monopolistically competitive firm has some control over price because:
A) Government approves prices
B) There are few competitors
C) It sets industry standards
D) Its product is differentiated.
  • 6. What allows consumers to easily switch between brands in monopolistic competition?
A) Single product type
B) Price rigidity
C) Government regulation
D) Elastic demand.
  • 7. "Monopolistic competition is a market structure where firms sell products that are:"
A) Perfect substitutes
B) Homogeneous goods
C) Similar but not identical.
D) Regulated by the government
  • 8. Monopolistic competition is a market structure where firms sell products that are:"
A) Perfect substitutes
B) Regulated by the government
C) Homogeneous goods
D) Similar but not identical.
  • 9. Heavy spending on advertising is an example of:
A) Cost leadership
B) Collusive pricing
C) Non-price competition.
D) Pure competition
  • 10. When a company changes packaging and advertising to stand out, it uses:
A) Price leadership
B) Price discrimination
C) Product differentiation.
D) Predatory pricing
  • 11. When resources are used to produce goods that best satisfy consumer preferences, it is called:
A) Allocative efficiency.
B) Technical efficiency
C) Economic inequality
D) Productive efficiency
  • 12. Which statement best defines economic efficiency in monopolistic competition?
A) Maximizing price to increase firm profit
B) Using resources in the best possible way to satisfy consumer needs.
C) Eliminating all forms of competition
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) Permanent monopoly power
C) Constant market dominance
D) Barriers to entry
  • 14. Which of the following best describes brand loyalty?
A) Firms changing prices frequently to attract customers
B) Companies copying competitors' designs
C) Consumers repeatedly buy the same brand despite alternatives.
D) Consumers switching to cheaper products easily
  • 15. In the long run, firms in monopolistic competition earn:
A) Normal profit.
B) Supernormal profit
C) No revenue
D) Negative profit
  • 16. The main feature that separates monopolistic competition from perfect competition is:
A) Product differentiation.
B) Government regulation
C) Price control
D) Single seller
  • 17. 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
  • 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) Economies of Scale
D) Rent-Seeking
  • 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) Price Ceiling
B) Profit Maximization
C) Higher Prices.
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) Market Equilibrium
B) Price Discrimination
C) Technological Superiority
D) Control of Essential Resources.
  • 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) Economies of Scale
B) Price Discrimination
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) Perfect Competition
B) Price Ceiling
C) Market Equilibrium
D) Lack of Consumer Choice.
  • 26. When a monopolist sets output where MC = MR, it is practicing what principle?
A) Profit Maximization.
B) Market Equilibrium
C) Price Control
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) 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) 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) P55
B) P60
C) P66
D) P70
  • 30. A phone is on sale for P450 (90% of original price). What was the original price?
A) P550
B) P500
C) P450
D) P300
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