QUIZ.SOCSCI 4.013.MARKET STRUCTURES AND PRICE OUTPUT DETERMINATION
1. What term describes a market structure characterized by many small firms, identical products, and ease of entry and exit?
A. Perfect competition
B. Monopoly
C. Oligopoly
D. Monopolistic competition
Answer: A. Perfect competition
Explanation: Perfect competition is a market structure where numerous small firms produce identical products, and entry or exit from the market is easy.
2. Which factor influences market structure by determining the ease with which new firms can enter or existing firms can exit a market?
A. Number of firms
B. Product differentiation
C. Entry and exit barriers
D. Government regulations
Answer: C. Entry and exit barriers
Explanation: Entry and exit barriers determine the level of difficulty for firms to enter or leave the market, shaping the structure of the market.
3. In a monopolistic competition market structure, what is a distinguishing characteristic?
A. Identical products
B. Large number of firms
C. Single firm dominance
D. High barriers to entry
Answer: B. Large number of firms
Explanation: Monopolistic competition is characterized by many firms competing, each producing differentiated products.
4. What graphical representation illustrates the relationship between quantity supplied and quantity demanded in a market?
A. Cost curve
B. Production function
C. Supply and demand curve
D. Revenue curve
Answer: C. Supply and demand curve
Explanation: The supply and demand curve visually represents the relationship between the quantity of goods supplied by producers and the quantity demanded by consumers.
5. In which market structure does a single firm have exclusive control over the entire market?
A. Oligopoly
B. Perfect competition
C. Monopoly
D. Monopolistic competition
Answer: C. Monopoly
Explanation: A monopoly exists when a single firm dominates the entire market, controlling supply and price.
6. What determines the equilibrium price and quantity in a market?
A. Government regulations
B. Firms' pricing strategies
C. Interaction of supply and demand
D. Technological advancements
Answer: C. Interaction of supply and demand
Explanation: The equilibrium price and quantity are established where the supply curve and demand curve intersect, reflecting market balance.
7. In a competitive market, when does profit maximization occur in the short run?
A. When total revenue equals total cost
B. When marginal cost is zero
C. When marginal cost equals marginal revenue
D. When fixed costs are minimized
Answer: C. When marginal cost equals marginal revenue
Explanation: Profit maximization occurs when the additional cost of producing one more unit (marginal cost) equals the additional revenue from selling it (marginal revenue).
8. What is the primary goal of firms in a competitive market in the long run?
A. Minimize costs
B. Maximize market share
C. Maximize fixed costs
D. Minimize variable costs
Answer: A. Minimize costs
Explanation: In the long run, firms in competitive markets aim to minimize costs and achieve productive efficiency to remain viable and competitive.
9. Which cost includes both fixed and variable costs?
A. Marginal cost
B. Average variable cost
C. Average total cost
D. Total cost
Answer: D. Total cost
Explanation: Total cost is the sum of fixed costs (unchanging with output) and variable costs (change with output).
10. What occurs in a competitive market in the short run when total revenue falls below total variable costs?
A. Profit maximization
B. Shutdown point
C. Cost minimization
D. Break-even point
Answer: B. Shutdown point
Explanation: A firm reaches the shutdown point when its revenue cannot cover its variable costs, making it rational to cease production temporarily.
11. What market structure is characterized by a small number of large firms dominating the market?
A. Perfect competition
B. Monopoly
C. Oligopoly
D. Monopolistic competition
Answer: C. Oligopoly
Explanation: Oligopoly is marked by a few large firms dominating the market, often with significant barriers to entry.
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BSED Major in Social Studies 2
Non-FictionThese materials provide lecture notes, quizzes, and resources for BSED Social Studies students, covering key topics such as history, geography, economics, and political science. Marjhon Mascardo shares a personal note, reflecting on his college jour...
