MCQ 11 Mark
At a price below the equilibrium price, there is:
- AExcess supply.
- ✓Excess demand.
- CCeiling.
- DFlooring.
Answer
View full question & answer→Correct option: B.
Excess demand.
Questions
M.C.Q (1 Marks)
Take a timed test
69 questions · 67 auto-graded MCQ + 2 self-marked written.
MCQ 21 Mark
The price at which quantity supplied and quantity demanded are equal is termed as:
- ✓Equilibrium price.
- BMarket price.
- CBoth $(a)$ and $(b).$
- DNone of the above.
Answer
View full question & answer→Correct option: A.
Equilibrium price.
MCQ 31 Mark
When both demand and supply decreases in the same proportion, then equilibrium price will:
- ✓Remain the same.
- BRise.
- CFall.
- DNone of the above.
Answer
View full question & answer→Correct option: A.
Remain the same.
MCQ 41 Mark
Imperfect competition is a type of market structure showing some but not all feature of competitive market. Which of the following is/ are imperfect competition?
- APerfect competition.
- BMonopolistic competition.
- COligopoly.
- ✓Both $(a)$ and $(b).$
Answer
View full question & answer→Correct option: D.
Both $(a)$ and $(b).$
MCQ 51 Mark
Which of the following is not an essential condition of pure competition?
- ALarge number of buyers and sellers.
- BHomogeneous product.
- CFreedom of entry and exit.
- ✓Absence of transport cost.
Answer
View full question & answer→Correct option: D.
Absence of transport cost.
MCQ 61 Mark
An attempt to set a minimum price for a good is called a:
- ✓Price floor.
- BPrice ceiling.
- CPrice subsidy.
- DBoth $(a)$ and $(c)$
Answer
View full question & answer→Correct option: A.
Price floor.
MCQ 71 Mark
Marginal revenue of a firm is constant throughout under:
- ✓Perfect competition.
- BMonopolistic co.
- COligopoly.
- DAll the above.
Answer
View full question & answer→Correct option: A.
Perfect competition.
MCQ 81 Mark
If price is forced to stay below equilibrium price $.........$
- Aexcess supply exists.
- ✓excess demand exists.
- Ceither $(a)$ or $(b).$
- DNone of these
Answer
View full question & answer→Correct option: B.
excess demand exists.
MCQ 91 Mark
Monopoly means:
- ASingle firm.
- BNo close substitutes.
- CBarriers to entry.
- DAll of the above.
MCQ 101 Mark
Differentiated but close substitutes exist under:
- APerfect competition.
- BMonopoly.
- ✓Monopolistic competition.
- DAll of the above.
Answer
View full question & answer→Correct option: C.
Monopolistic competition.
MCQ 111 Mark
$.........$ is a situation of the market in which demand for a commodity is exactly equal to its supply corresponding to a particular price.
- AConsumer equilibrium.
- BProducer equilibrium.
- ✓Market equilibrium.
- DBalance of Trade.
Answer
View full question & answer→Correct option: C.
Market equilibrium.
MCQ 121 Mark
Assume that in the market for a good $Z$ there is a simultaneous increase in demand and the quantity supplied. The result will be:
- AAn increase in equilibrium price and quantity.
- BA decrease in equilibrium price and quantity.
- ✓An increase in equilibrium quantity and uncertain effect on equilibrium price.
- DA decrease in equilibrium price and increase in equilibrium quantity.
Answer
View full question & answer→Correct option: C.
An increase in equilibrium quantity and uncertain effect on equilibrium price.
MCQ 131 Mark
Which is the best example of monopoly market?
- ACommunication market.
- ✓Indian railway.
- CStock exchange.
- D$\text{OPEC} ($Oil Producing Export Countries$).$
Answer
View full question & answer→Correct option: B.
Indian railway.
MCQ 141 Mark
Under monopoly, monopolist tries to increase his profits by restricting supply of his product and fixing:
- ALow price.
- ✓High price.
- CMarket price.
- DAll of these.
Answer
View full question & answer→Correct option: B.
High price.
As a price maker, a monopolist has full control over price. Thus, he charges high price to maximise the profits and can restrict supply of his product.
MCQ 151 Mark
Monopolist can determine $.........$
- Aprice.
- Boutput.
- ✓both $(a)$ and $(b).$
- Dnone of these.
Answer
View full question & answer→Correct option: C.
both $(a)$ and $(b).$
MCQ 161 Mark
Under what condition, equilibrium price will increase and equilibrium quantity will decrease?
- AIncrease in supply.
- ✓Decrease in supply.
- CIncrease in demand.
- DDecrease in demand.
Answer
View full question & answer→Correct option: B.
Decrease in supply.
Demand curve remain unchanged, if there is a decrease in supply, supply curve and equilibrium point will shift leftwards. As a result, equilibrium price will increase and equilibrium quantity will decrease
MCQ 171 Mark
An increase in demand with unchanged supply leads to $.........$
- Arise in equilibrium price and fall in equilibrium quantity.
- Bfall in both equilibrium price and quantity.
- ✓rise in both equilibrium price and quantity.
- Dfall in equilibrium price and rise in equilibrium quantity.
Answer
View full question & answer→Correct option: C.
rise in both equilibrium price and quantity.
MCQ 181 Mark
Rent control is an example of:
- APrice floor.
- ✓Price ceiling.
- CEquilibrium price.
- DNone of the above
Answer
View full question & answer→Correct option: B.
Price ceiling.
MCQ 191 Mark
If in a oligopoly, the fir1ms are selling homogeneous products, then the oligopoly firm is called:
- APure competition.
- ✓Pure oligopoly.
- CMonopoly.
- DDuopoly.
Answer
View full question & answer→Correct option: B.
Pure oligopoly.
MCQ 201 Mark
From the following, in which market, there is a free entry and exit of firms?
- AMonopoly and oligopoly.
- BMonopolistic competition and monopoly.
- CPerfect competition and oligopoly.
- ✓Perfect competition and monopolistic competition.
Answer
View full question & answer→Correct option: D.
Perfect competition and monopolistic competition.
MCQ 211 Mark
Under perfect competition, what is the relationship between Price $P$ , Average Revenue and Marginal Revenue?
- ✓$P = =$
- B$P > >$
- C$P < <$
- D$P = >$
Answer
View full question & answer→Correct option: A.
$P = =$
MCQ 221 Mark
Firm in a monopolistic market has $.........$ control over price.
- Ano.
- Bfull.
- ✓partial.
- Dnone of these.
Answer
View full question & answer→Correct option: C.
partial.
MCQ 231 Mark
What is the impact of change in supply on market equilibrium when demand is perfectly inelastic?
- ABoth equilibrium price and equilibrium quantity will change.
- BBoth equilibrium price and equilibrium quantity will not change.
- CEquilibrium price remains same and equilibrium quantity will change.
- ✓Equilibrium price will change and equilibrium quantity remains same.
Answer
View full question & answer→Correct option: D.
Equilibrium price will change and equilibrium quantity remains same.
In this case, quantity will remain unchanged, only price will increase with fall in supply and vice$-$versa.
MCQ 241 Mark
Under what condition, both equilibrium price and equilibrium quantity will decrease?
- AIncrease in demand.
- BIncrease in supply.
- ✓Decrease in demand.
- DDecrease in supply.
Answer
View full question & answer→Correct option: C.
Decrease in demand.
MCQ 251 Mark
When demand decreases and there is no shift in supply, the equilibrium price $.........$ and quantity $.........$
- ARises, rises.
- BRises, falls.
- ✓Falls, falls.
- DFalls, rises.
Answer
View full question & answer→Correct option: C.
Falls, falls.
MCQ 261 Mark
A seller cannot influence the market price under:
- ✓Perfect Competition.
- BMonopoly.
- CMonopolistic competition.
- DAll of the above.
Answer
View full question & answer→Correct option: A.
Perfect Competition.
MCQ 271 Mark
When supply decreases and there is no change in demand, then equilibrium price $.........$ and quantity $.........$
- AFalls, rises.
- ✓Rises, falls.
- CRises, rises.
- DFalls, falls.
Answer
View full question & answer→Correct option: B.
Rises, falls.
MCQ 281 Mark
A price ceiling is:
- AA minimum price that a firm may charge for a good or service.
- BUsually established by the manufacturer of a product.
- ✓The maximum price that a firm may charge for a good or service.
- DNone of the above.
Answer
View full question & answer→Correct option: C.
The maximum price that a firm may charge for a good or service.
MCQ 291 Mark
Homogenous product means products are:
- ASimilar.
- BClose substitutes.
- ✓Quite alike.
- DNone of the above.
Answer
View full question & answer→Correct option: C.
Quite alike.
MCQ 301 Mark
Market which has a few large firms is $.........$
- ✓oligopoly.
- Bperfect competition.
- Cmonopolistic competition.
- Dmonopsony.
Answer
View full question & answer→Correct option: A.
oligopoly.
MCQ 311 Mark
Assume that consumers' incomes and the number of sellers in the market for goods A both decrease. Based upon this information, we can conclude, with certainty, that the equilibrium $.........$
- Aprice will increase.
- Bprice will decrease.
- Cquantity will increase.
- ✓quantity will decrease.
Answer
View full question & answer→Correct option: D.
quantity will decrease.
MCQ 321 Mark
In which market structure, price and output solution is indeterminate?
- ✓Oligopoly.
- BMonopolistic competition.
- CPerfect competition.
- DMonopoly.
Answer
View full question & answer→Correct option: A.
Oligopoly.
MCQ 331 Mark
When both demand and supply increases in the same proportion then equilibrium price will:
- ✓Remain the same.
- BRise.
- CFall.
- DNone of the above.
Answer
View full question & answer→Correct option: A.
Remain the same.
MCQ 341 Mark
When demand decreases and there is no shift in supply, the equilibrium price $.........$ and quantity $.........$
- ARises, rises.
- BRises, falls.
- ✓Falls, falls.
- DFalls, rises.
Answer
View full question & answer→Correct option: C.
Falls, falls.
MCQ 351 Mark
When increase in demand in more than increase in supply, then equilibrium quantity will:
- ARemain the same.
- ✓Rise.
- CFall.
- DNone of the above.
Answer
View full question & answer→Correct option: B.
Rise.
MCQ 361 Mark
When supply increases and there is no change in demand, then equilibrium price $.........$ and quantity $.........$
- ✓Falls, rises.
- BRises falls.
- CRises rises.
- DFalls, falls.
Answer
View full question & answer→Correct option: A.
Falls, rises.
MCQ 371 Mark
Demand curve of a firm is perfectly elastic under:
- ✓Perfect competition.
- BMonopoly.
- CMonopolistic competition.
- DOligopoly.
Answer
View full question & answer→Correct option: A.
Perfect competition.
MCQ 381 Mark
When demand increases with no change in supply, equilibrium price $.........$ and quantity $.........$
- ✓Rises, rises.
- BRises, falls.
- CFalls, falls.
- DFalls, rises.
Answer
View full question & answer→Correct option: A.
Rises, rises.
MCQ 391 Mark
With a given supply curve a decrease in demand causes $.........$
- Aan overall decrease in price but an increase in equilibrium quantity.
- Ban overall increase in price but a decrease in equilibrium quantity.
- ✓an overall decrease in price and a decrease in equilibrium quantity.
- Dno change in overall price but a reduction in equilibrium quantity.
Answer
View full question & answer→Correct option: C.
an overall decrease in price and a decrease in equilibrium quantity.
MCQ 401 Mark
There is inverse relation between price and demand for the product of a firm under:
- AMonopoly only.
- BMonopolistic competition only.
- ✓Both under monopoly and monopolistic competition.
- DPerfect competition only.
Answer
View full question & answer→Correct option: C.
Both under monopoly and monopolistic competition.
MCQ 411 Mark
Few firms exist under:
- APerfect competition.
- ✓Oligopoly.
- CMonopolistic competition.
- DBoth perfect and monopolistic competition.
Answer
View full question & answer→Correct option: B.
Oligopoly.
MCQ 421 Mark
A firm is able to sell any quantity of a good at a given price. The firm’s marginal revenue will be:
- AGreater than Average Revenue.
- BLess than Average Revenue.
- ✓Equal to Average Revenue.
- DZero.
Answer
View full question & answer→Correct option: C.
Equal to Average Revenue.
MCQ 431 Mark
Selling cost is insignificant under:
- ✓Perfect competition.
- BMonopoly.
- CMonopolistic competition.
- DAll of the above.
Answer
View full question & answer→Correct option: A.
Perfect competition.
MCQ 441 Mark
Differentiated products is a characteristic of:
- AMonopolistic competition only.
- BOligopoly only.
- ✓Both monopolistic competition and oligopoly.
- DMonopoly.
Answer
View full question & answer→Correct option: C.
Both monopolistic competition and oligopoly.
MCQ 451 Mark
If the market supply is less than the market demand of a commodity at a given price, it is called:
- AExcess supply.
- ✓Excess demande.
- CDeficit demand.
- DMarket supply.
Answer
View full question & answer→Correct option: B.
Excess demande.
MCQ 461 Mark
When there is increase in demand and decrease in supply, equilibrium price:
- AFalls.
- ✓Rises.
- CConstant.
- DNone of these.
Answer
View full question & answer→Correct option: B.
Rises.
MCQ 471 Mark
If market price is above equilibrium price, there exists a situation of:
- ✓Excess supply.
- BExcess demand.
- CPrice ceiling.
- DBoth $(a)$ and $(c).$
Answer
View full question & answer→Correct option: A.
Excess supply.
Question 481 Mark
Suppose the demand and supply curve of a Commodity$-X$ is given by the following two equations simultaneously:
$Qd = 200 - p$
$Qs = 50 + 2p$
Find the equilibrium price and equilibrium quantity.
Suppose that the price of a factor of production producing the commodity has changed, resulting in the new supply curve given by the equation
$Qs' = 80 + 2p$
Analyse the new equilibrium price and new equilibrium quantity as against the original equilibrium price and equilibrium quantity.
$Qd = 200 - p$
$Qs = 50 + 2p$
Find the equilibrium price and equilibrium quantity.
Suppose that the price of a factor of production producing the commodity has changed, resulting in the new supply curve given by the equation
$Qs' = 80 + 2p$
Analyse the new equilibrium price and new equilibrium quantity as against the original equilibrium price and equilibrium quantity.
Answer
View full question & answer→We know that the equilibrium price and quantity are achieved at;
$Qd = Qs$
$200 - p = 50 + 2p$
$(-) 3p = (-) 150$
Therefore, Equilibrium Price
$p = 50$
And, Equilibrium Quantity
$q = 200 - 50 = 150$ units
If the price of factor of production has changed, then under the new conditions;
$Qd = Qs$
$200 - p = 80 + 2p$
$(-) 3p = (-) 120$
Therefore, Equilibrium Price
$p = 40$
And, Equilibrium Quantity
$q = 200 - 40 = 160$ units
As, Intercept on $X-$axis of Supply equation, $Qs = 50 + 2p$ is $50 [$By Putting Price $(P) = 0]$ and Intercept on $X-$axis of supply equation, $Qs' = 80 + 2p$ is $80 [$By Putting Price $(P) = 0].$
Since, Intercept of $X-$axis Increases, Supply curve shifts Rightward as shown below:
So, equilibrium price falls from $₹ 50$ to $₹ 40$ and Equilibrium Quantity rises from $150$ units to $160$ units.
$Qd = Qs$
$200 - p = 50 + 2p$
$(-) 3p = (-) 150$
Therefore, Equilibrium Price
$p = 50$
And, Equilibrium Quantity
$q = 200 - 50 = 150$ units
If the price of factor of production has changed, then under the new conditions;
$Qd = Qs$
$200 - p = 80 + 2p$
$(-) 3p = (-) 120$
Therefore, Equilibrium Price
$p = 40$
And, Equilibrium Quantity
$q = 200 - 40 = 160$ units
As, Intercept on $X-$axis of Supply equation, $Qs = 50 + 2p$ is $50 [$By Putting Price $(P) = 0]$ and Intercept on $X-$axis of supply equation, $Qs' = 80 + 2p$ is $80 [$By Putting Price $(P) = 0].$
Since, Intercept of $X-$axis Increases, Supply curve shifts Rightward as shown below:
So, equilibrium price falls from $₹ 50$ to $₹ 40$ and Equilibrium Quantity rises from $150$ units to $160$ units.
MCQ 491 Mark
Suppose that the supply of cameras increases due to an increase in imports. Which of the following statements will most likely occur?
- AThe equilibrium price of cameras will increase.
- BThe equilibrium quantity of cameras exchanged will decrease.
- CThe equilibrium price of camera film will decrease.
- ✓The equilibrium quantity of camera film exchanged will increase.
Answer
View full question & answer→Correct option: D.
The equilibrium quantity of camera film exchanged will increase.
MCQ 501 Mark
In monopolistic competition, which relationship is true from the following between $AR$ and $MR?$
- A$AR = MR.$
- B$AR < MR.$
- ✓$AR > MR.$
- DNone of these.
Answer
View full question & answer→Correct option: C.
$AR > MR.$
Both $AR$ and $MR$ curves are downward sloping under monopolistic competition because a firm can sell more commodity by lowering the price. The $MR$ curve is half of $AR$ curve, i.e. $AR > MR.$
MCQ 511 Mark
When both demand and supply decrease in the same proportion, then the equilibrium quantity will:
- ARemain the same.
- BRise.
- ✓Fall.
- DNone of the above.
Answer
View full question & answer→Correct option: C.
Fall.
MCQ 521 Mark
At a price above the equilibrium price, there is:
- ✓Excess supply.
- BExcess demand.
- CCeiling.
- DFlooring.
Answer
View full question & answer→Correct option: A.
Excess supply.
MCQ 531 Mark
If price is above then equilibrium Price, there is:
- AExcess demand.
- ✓Excess supply.
- CPrice ceiling.
- DPrice flooring.
Answer
View full question & answer→Correct option: B.
Excess supply.
MCQ 541 Mark
Demand curve is inelastic under:
- APerfect competition.
- ✓Monopoly.
- CMonopolistic competition.
- DAll of the above.
Answer
View full question & answer→Correct option: B.
Monopoly.
MCQ 551 Mark
Equilibrium price may be determined through $.........$
- Aonly demand.
- Bonly supply.
- ✓both demand and supply.
- Dnone of the above.
Answer
View full question & answer→Correct option: C.
both demand and supply.
MCQ 561 Mark
Demand curve is perfectly elastic under:
- ✓Perfect competition.
- BMonopoly.
- CMonopolistic competition.
- DAll of the above.
Answer
View full question & answer→Correct option: A.
Perfect competition.
MCQ 571 Mark
Equilibrium price and output changes when:
- ADemand changes.
- BSupply changes.
- ✓Both demand and supply changes.
- DAll of the above.
Answer
View full question & answer→Correct option: C.
Both demand and supply changes.
MCQ 581 Mark
When both demand and supply increase in the same proportion then equilibrium quantity will:
- ✓Remain the same.
- BRise.
- CFall.
- DNone of the above.
Answer
View full question & answer→Correct option: A.
Remain the same.
MCQ 591 Mark
An increase in supply with demand remaining the same bring about $.........$
- ✓an increase in equilibrium quantity and decrease in equilibrium price.
- Ban increase in equilibrium price and decrease in equilibrium quantity.
- Cdecrease in both equilibrium price and quantity.
- Dnone of the above.
Answer
View full question & answer→Correct option: A.
an increase in equilibrium quantity and decrease in equilibrium price.
MCQ 601 Mark
Suppose the technology for producing personal computers improves and, at the same time, individuals discover new uses for personal computers so that there is greater utilisation of personal computers. Which of the following statements/ factors will happen to equilibrium price and equilibrium quantity?
- APrice will increase; quantity cannot be determined.
- BPrice will decrease; quantity cannot be determined.
- ✓Quantity will increase; price cannot be determined.
- DQuantity will decrease; price cannot be determined.
Answer
View full question & answer→Correct option: C.
Quantity will increase; price cannot be determined.
MCQ 611 Mark
If there is shortage of certain goods, the government introduces $.........$ for distribution of commodity to consumers.
- Aplanning.
- Bmarketing.
- ✓rationing.
- Dfinancing.
Answer
View full question & answer→Correct option: C.
rationing.
MCQ 621 Mark
‘Homogenous products’ is a characteristic of:
- APerfect competition only.
- BPerfect oligopoly only.
- ✓Both $(a)$ and $(b).$
- DNone of the above.
Answer
View full question & answer→Correct option: C.
Both $(a)$ and $(b).$
MCQ 631 Mark
Demand curve is elastic under:
- APerfect competition.
- BMonopoly.
- ✓Monopolistic competition.
- DAll of the above.
Answer
View full question & answer→Correct option: C.
Monopolistic competition.
MCQ 641 Mark
When increase in demand is more than increase in supply, then equilibrium price will:
- ARemain the same.
- ✓Rise.
- CFall.
- DNone of the above.
Answer
View full question & answer→Correct option: B.
Rise.
MCQ 651 Mark
The product sold by monopolist has:
- AMany substitutes.
- ✓Close substitutes.
- CNo close substitutes.
- DPerfect substitutes.
Answer
View full question & answer→Correct option: B.
Close substitutes.
MCQ 661 Mark
Entry is restricted under:
- APerfect competition.
- ✓Monopoly.
- CMonopolistic competition.
- DAll of the above.
Answer
View full question & answer→Correct option: B.
Monopoly.
MCQ 671 Mark
There are only a few sellers under:
- APerfect Competition.
- BMonopolistic competition.
- ✓Monopoly.
- DOligopoly.
Answer
View full question & answer→Correct option: C.
Monopoly.
MCQ 681 Mark
In perfect competition, as the firm is a price taker, the $.........$ curve is a horizontal straight line.
- Amarginal cost.
- Btotal cost.
- Ctotal revenue.
- ✓marginal revenue.
Answer
View full question & answer→Correct option: D.
marginal revenue.
MCQ 691 Mark
If in an industry, demand and supply will not intersect in positive quadrant, then it is called:
- AIllegal industry.
- BViable industry.
- ✓Non-viable industry.
- DSick industry.
Answer
View full question & answer→Correct option: C.
Non-viable industry.
A non$-$viable industry is one which will not produce the product in an economy. It may be because cost of product is too high and consumers are not willing to pay the price.