Economics ยท Commerce Accountancy
Microeconomics and Pricing
1,413 Questions
Microeconomics and pricing analyze market structures, consumer utility, marginal cost, and strategic pricing models like predatory pricing. These foundational economic concepts are regularly featured in civil services and state administrative examinations. Solve these practice questions to understand market equilibrium, demand elasticity, and competitive firm behavior.
Market equilibrium pricingIncome elasticity of demandMarginal cost conceptsUtility functions analysisPredatory pricing strategiesOligopoly market structures
Microeconomics and Pricing Questions
-
parallel to OX axis
-
parallel to OY axis
-
downward sloping
-
kinked
D
Correct answer
Explanation
The shape of demand curve is kinked in case of oligopoly.
The demand curve is parallel to OX axis in perfect competition and downward sloping in monopoly and monopolistic competition.
-
AR curve
-
MR curve
-
Indifference curve
-
MC curve
A
Correct answer
Explanation
Demand curve is also known as AR curve.
-
low elastic demand
-
high elastic demand
-
inelastic demand
-
none of these
B
Correct answer
Explanation
The upper portion of kinked demand curve represents high elastic demand while lower portion represents low elastic demand.
-
demand
-
supply
-
factors of production
-
climate
B
Correct answer
Explanation
The role of supply is dominant in the long run.
The demand plays dominant role in short run.
-
monopoly
-
perfect competition
-
monopolistic competition
-
none of these
A
Correct answer
Explanation
In monopoly, the sole firm operating in the market is firm as well as industry.
-
possible in case of perfect competition.
-
possible in case of monopolistic competition.
-
possible in case of monopoly.
-
never possible in any case.
C
Correct answer
Explanation
The monopolist can earn super normal profits in the long run.
Super normal profits are not possible in any other market form in long run.
-
The monopolist charging the highest price.
-
The monopolist charging different prices from the different classes of customers.
-
The monopolist charging different prices in different markets.
-
None of these.
A
Correct answer
Explanation
It is first degree price discrimination.
(B) is second degree and (C) is third degree price discrimination.
-
monopoly
-
perfect competition
-
monopolistic competition
-
none of these
C
Correct answer
Explanation
In monopolistic competition, the buyers do not have perfect knowledge.
-
Positive
-
Negative
-
One
-
Zero
D
Correct answer
Explanation
Elasticity is one, then MR is zero.
If elasticity is more than one, then MR is positive and vice versa.
-
All firms earning normal profits
-
All firms in equilibrium
-
No entry or exit of firm from the market
-
All of these
D
Correct answer
Explanation
All of these are the conditions for long run equilibrium of industry.
-
less elastic
-
more elastic
-
inelastic
-
perfectly elastic
A
Correct answer
Explanation
The shape is less elastic.
In monopolistic competition, it is more elastic and perfectly elastic in perfect competition.
-
support price
-
market price
-
control price
-
normal price
C
Correct answer
Explanation
It is called control price.
If the price fixed by government is higher then it is called support price.
-
producers
-
consumer
-
government
-
none of these
A
Correct answer
Explanation
The support price protects producers.
The control price protects the consumers.
-
impossible utilisation of resources
-
optimum utilisation of resources
-
less than optimum utilisation of resources
-
none of these
C
Correct answer
Explanation
The points lying inside PPC curve area show less than optimum utilisation of resources.
Points lying outside show impossible utilisation due to the present level of technology, while points on the line show the optimum utilisation.
-
outwards and to the left
-
outwards and to the right
-
inwards and to the left
-
inwards and to the right
B
Correct answer
Explanation
Changing technology and economic development help the PPC curve to shift outwards and to the right.