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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) Price leadership
B) Productive efficiency.
C) Allocative efficiency
D) Marginal analysis
  • 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) Full monopoly
C) No control
D) Perfect elasticity
  • 5. A monopolistically competitive firm has some control over price because:
A) Its product is differentiated.
B) Government approves prices
C) There are few competitors
D) It sets industry standards
  • 6. What allows consumers to easily switch between brands in monopolistic competition?
A) Price rigidity
B) Elastic demand.
C) Single product type
D) Government regulation
  • 7. "Monopolistic competition is a market structure where firms sell products that are:"
A) Regulated by the government
B) Homogeneous goods
C) Similar but not identical.
D) Perfect substitutes
  • 8. 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
  • 9. Heavy spending on advertising is an example of:
A) Collusive pricing
B) Cost leadership
C) Pure competition
D) Non-price competition.
  • 10. When a company changes packaging and advertising to stand out, it uses:
A) Product differentiation.
B) Predatory pricing
C) Price discrimination
D) Price leadership
  • 11. When resources are used to produce goods that best satisfy consumer preferences, it is called:
A) Economic inequality
B) Technical efficiency
C) Allocative efficiency.
D) Productive efficiency
  • 12. Which statement best defines economic efficiency in monopolistic competition?
A) Eliminating all forms of competition
B) Using resources in the best possible way to satisfy consumer needs.
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) Constant market dominance
B) Barriers to entry
C) Long-run normal profit.
D) Permanent monopoly power
  • 14. Which of the following best describes brand loyalty?
A) Consumers repeatedly buy the same brand despite alternatives.
B) Companies copying competitors' designs
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) No revenue
B) Negative profit
C) Supernormal 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) Control of Essential Resources.
B) Economies of Scale
C) Rent-Seeking
D) Price Discrimination
  • 18. 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.
  • 19. a monopoly is called a ____ because it has full control over sitting the price of its product
A) Price Maker.
B) Competitive
C) Price Taker
D) Free Rider
  • 20. Consumers pay higher electricity bills because there is only one provider in the market. This represents:
A) Rent-Seeking
B) Higher Prices.
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) 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) Reduced Consumer Choice
B) X-Inefficiency
C) Higher Prices
D) Restricted Output.
  • 23. A research-based firm spends billions on R&D and secures patents, preventing rivals from duplicating its medicine.This advantage shows:
A) Restricted Output
B) Barriers to Entry through Intellectual Property Rights.
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) 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) Lack of Consumer Choice.
C) Price Ceiling
D) Market Equilibrium
  • 26. When a monopolist sets output where MC = MR, it is practicing what principle?
A) Rent-Seeking
B) Profit Maximization.
C) Price Control
D) Market Equilibrium
  • 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) 2000
D) 4000
  • 29. A P80 item is 25% off, then taxed 10% on the sale price.

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