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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) Limiting market entry
C) Price collusion
D) Producing identical goods
  • 2. Producing goods at the lowest possible cost is known as:
A) Price leadership
B) Allocative efficiency
C) Productive efficiency.
D) Marginal analysis
  • 3. In monopolistic competition, decision-making by firms is:
A) Centralized across firms
B) Independent.
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) Full monopoly
B) No control
C) Perfect elasticity
D) Market power.
  • 5. A monopolistically competitive firm has some control over price because:
A) There are few competitors
B) Government approves prices
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) Elastic demand.
D) Government regulation
  • 7. "Monopolistic competition is a market structure where firms sell products that are:"
A) Regulated by the government
B) Perfect substitutes
C) Homogeneous goods
D) Similar but not identical.
  • 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) 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 leadership
B) Product differentiation.
C) Price discrimination
D) Predatory pricing
  • 11. When resources are used to produce goods that best satisfy consumer preferences, it is called:
A) Economic inequality
B) Technical efficiency
C) Productive efficiency
D) Allocative efficiency.
  • 12. Which statement best defines economic efficiency in monopolistic competition?
A) Eliminating all forms of competition
B) Maximizing price to increase firm profit
C) Producing the most goods regardless of demand
D) Using resources in the best possible way to satisfy consumer needs.
  • 13. The freedom of entry and exit in monopolistic competition ensures:
A) Barriers to entry
B) Permanent monopoly power
C) Long-run normal profit.
D) Constant market dominance
  • 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) Normal profit.
C) Negative profit
D) No revenue
  • 16. The main feature that separates monopolistic competition from perfect competition is:
A) Product differentiation.
B) Price control
C) Single seller
D) Government regulation
  • 17. 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.
  • 18. Which barrier to entry is created when a company owns a vital raw material like diamond mines?
A) Economies of Scale
B) Rent-Seeking
C) Control of Essential Resources.
D) Price Discrimination
  • 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) Higher Prices.
B) Profit Maximization
C) Price Ceiling
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) Price Discrimination
B) Market Equilibrium
C) Control of Essential Resources.
D) Technological Superiority
  • 22. Which social cost of monopoly explains why consumers pay more compared to perfect competition?
A) X-Inefficiency
B) Higher Prices
C) Restricted Output.
D) Reduced Consumer Choice
  • 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) Restricted Output
C) Rent-Seeking Behavior
D) Barriers to Entry through Intellectual Property Rights.
  • 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) Lack of Consumer Choice.
B) Market Equilibrium
C) Perfect Competition
D) Price Ceiling
  • 26. When a monopolist sets output where MC = MR, it is practicing what principle?
A) Profit Maximization.
B) Market Equilibrium
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) Control of Essential Resources.
B) Profit Maximization
C) Price Ceiling
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) 3500
C) 1200
D) 4000
  • 29. A P80 item is 25% off, then taxed 10% on the sale price.

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