Tag: economics

Questions Related to economics

Which of the following is NOT the feature of monopoly form of market?

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. Not elastic in nature

  2. Legal barriers

  3. Size of the market is too small

  4. All of the above

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Correct Option: A

In a free market economy, the optimal quality of goods and service is determined by ____________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. customers

  2. workers

  3. firms

  4. government

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Correct Option: A
Explanation:

Customer is one who purchase goods and services from the seller. Customer satisfaction is the main aim of the seller to earn goodwill in the market. Free market economy is one where there are no government or less government interventions. Hence, in a free market economy, the optimal quality of goods and service is determined by customers.

When elasticity of demand is equal to one, MR will be equal to _______.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. one

  2. zero

  3. infinity

  4. negative

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Correct Option: B

Marginal Revenue will be negative if the demand is _________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. relatively elastic

  2. unitary elastic

  3. relatively inelastic

  4. perfectly elastic

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Correct Option: C

Marginal revenue will be positive if elasticity of demand is _________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. less than one

  2. more than one

  3. equal to one

  4. equal to zero

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Correct Option: B

Marginal revenue will be zero if the elasticity of demand is _________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. less than one

  2. greater than one

  3. equal to one

  4. equal to zero

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Correct Option: C

If a demand curve exhibits unit elasticity for all prices the MR curve ___________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. is identical with it

  2. lies below the demand curve

  3. is parallel to the x-axis

  4. is identical with the y-axis

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Correct Option: C

Imperfect monopoly is a single firm industry where ___________________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. The cross elasticity in the market is zero

  2. The cross elasticity of demand between the product of the firm and that of other commodities in the market is small, though it is above zero

  3. The price elasticity to the market is zero

  4. The income elasticity to the market is zero

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Correct Option: B
Explanation:

In economic theory, imperfect competition is a type of market structure showing some but not all features of competitive markets. Forms of imperfect competition include: Monopolistic competition: A situation in which many firms with slightly different products compete. The cross elasticity of demand between the product of the firm and that of other commodities in the market is small, though it is above zero

Price discrimination is not profitable when _________________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. The demand curves are iso-elastic

  2. The demand curves are elastic

  3. The supply curves are iso-elastic

  4. The supply curves are elastic

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Correct Option: A

Relationship between revenue and elasticity of demand can be given by __________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. $ MR = AR \left ( 1-\frac{e}{p} \right )$

  2. $ MR = AR \left ( 1-\frac{1}{e} \right )$

  3. $ AR = MR \left ( 1-\frac{1}{e} \right )$

  4. $ AR > MR \left ( 1-\frac{1}{e} \right )$

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Correct Option: B