Economics · 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

Multiple choice business economics and quantitative methods introduction to managerial economics theories of employment and income concept of international trade macro economic analysis

At the point of equilibrium of firm (under perfect competition) _____________.

  1. MC curve must be rising

  2. MC curve must be falling

  3. MR cure must be rising

  4. None of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A firm is said to be in equilibrium when it maximizes its profit. It is the point when it has no tendency either to increase or contract its output. ... So in order to be in equilibrium, the firm will attempt to maximize the difference between total revenue and total costs.When MC is falling, the cost of producing an additional unit of output tends to decrease. Under perfect competition, when price is constant, the difference between the total revenue and total variable cost tends to increase.

Multiple choice geography food security in india components of food security government measures for food security important index numbers

Under PDS, a price lower than the market price is called _____.

  1. Fair price

  2. Minimum price

  3. Issue price

  4. Product price
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A price lower than the market price is called issue price. The price at which a new security will be distributed to the public prior to the new issue trading on the secondary market. Also commonly referred to as offering price.

Multiple choice commercial applications marketing mix - 4 p's meaning and objectives of pricing pricing strategies pricing

Consider the following

    1. Changes in quality
    2. Changes in compositions
    3. Tastes and preferences
    4. Price differences
    Which of the above impose limitations in the use of price indices to measure the terms o

    1. 1 and 2

    2. 2 and 3

    3. 1, 2 and 3

    4. 1, 2 and 4
    Reveal answer Fill a bubble to check yourself
    D Correct answer
    Explanation

    Price indices are limited by changes in product quality, composition, and price differences across regions or time. Tastes and preferences are subjective and generally do not directly invalidate the calculation of a price index.

    Multiple choice commercial applications marketing mix - 4 p's meaning and objectives of pricing pricing strategies pricing

    Administered pricing applies to the practice of pricing on the basis of.

    1. Cost

    2. Competitive pressure

    3. The law of supply and demand

    4. The policy decisions of the sellers
    Reveal answer Fill a bubble to check yourself
    D Correct answer
    Explanation

    Administered pricing occurs when prices are set by the seller or a regulatory authority rather than being determined solely by the forces of supply and demand in a competitive market.

    Multiple choice commercial applications marketing mix - 4 p's meaning and objectives of pricing pricing strategies pricing

    In which method of pricing does a manufacturer sell the same product at two or more different prices?

    1. Administered pricing

    2. Dual pricing

    3. Monopoly pricing

    4. Skimming pricing
    Reveal answer Fill a bubble to check yourself
    B Correct answer
    Explanation

    Dual pricing involves selling the same product at different prices to different customers or in different markets. This is a form of price discrimination.

    Multiple choice commercial applications marketing mix - 4 p's meaning and objectives of pricing pricing strategies pricing

    A very high price for a new product initially and to reduce the price gradually as competitors enter the market, is known as.

    1. Dual pricing

    2. Skimming pricing

    3. Monopoly pricing

    4. Administered pricing
    Reveal answer Fill a bubble to check yourself
    B Correct answer
    Explanation

    Skimming pricing is defined by launching a product at a high price to target early adopters and then gradually lowering the price to attract more price-sensitive customers as competition increases.

    Multiple choice commercial applications marketing mix - 4 p's meaning and objectives of pricing pricing strategies pricing

    A pricing policy designed to have the same price to customer in a specific area is?

    1. Zone pricing(Geographical pricing)

    2. Competitive pricing

    3. Customary pricing

    4. Monopoly pricing
    Reveal answer Fill a bubble to check yourself
    A Correct answer
    Explanation

    Zone pricing is a geographical pricing strategy where a company charges the same price to all customers within a specific geographic zone or region.

    Multiple choice commercial applications marketing mix - 4 p's meaning and objectives of pricing pricing strategies pricing

    Which method is suitable when the producer is not sure of market reactive for a price?

    1. Skimming pricing

    2. Administered pricing

    3. Accepted pricing

    4. Sealed bid pricing
    Reveal answer Fill a bubble to check yourself
    C Correct answer
    Explanation

    Accepted pricing (or going-rate pricing) is used when a firm follows the industry standard or the price set by competitors because they are uncertain about how the market will react to a unique price.

    Multiple choice commercial applications marketing mix - 4 p's meaning and objectives of pricing pricing strategies pricing

    Price of the product also depends upon the target customer.

    1. True

    2. False
    Reveal answer Fill a bubble to check yourself
    A Correct answer
    Explanation

    Price is a value that will purchase a finite quantity, weight or other measure of a good or services. Price is a consideration given in exchange for transfer of ownership. The price of a product may increase when the demand increases or reduce when the demand decreases. When the marketer wants to target the niche market, offering a high end product, the price for that product would increase, Where as when the marketer wants to target the lower class or middle class consumers, the prices would be set low. 

    Multiple choice commercial applications marketing mix - 4 p's meaning and objectives of pricing pricing strategies pricing

    Which of the following factors do not affect the fixation of the price of a product?

    1. The utility and demand

    2. Cost of the product

    3. Extent of competition in the market

    4. Social culture
    Reveal answer Fill a bubble to check yourself
    D Correct answer
    Explanation

    Price is a value that will purchase a finite quantity, weight or other measure of a good or services. Price is a consideration given in exchange for transfer of ownership. The price of a product may increase when the demand increases or reduce when the demand decreases. The cost of production plays the main role while fixing the price for a product as the price is almost always cost+ profit margin. To compete with the other companies in the market, price has to be around or lower than the price offered by the competitor.