MCQs on Forms of Market and Price Determination

Price determination is an exercise that depends on the buyers and sellers within a market. Under the perfect competition, the price will get stabilised, and all the sellers will have to sell their produce at the same price. So it is important for students of economics to understand the different forms of the market that exist in an economy along with the price determination mechanism for each of those market structures.

We have listed below a number of multiple-choice questions on Forms of Market and Price Determination to help the students gain a wider perspective of the topic.

1. Which of the following statements highlights one of the essential conditions of perfect competition?
   1. A perfect competition has a number of sellers and a few buyers
   2. A perfect competition has different levels of pricing for identical products at a particular point of time
   3. A perfect competition has the same pricing for identical products at a particular point of time
   4. None of the above

Answer: c

2. Which of the following institutes recommends the minimum support price in India?
   1. The minimum support price is recommended by the Ministry of Food and Agriculture
   2. The minimum support price is recommended by the Food Corporation of India
   3. The minimum support price is recommended by the Commission of Agricultural Costs and Prices
   4. The minimum support price is recommended by the Food and Agriculture Organisation

Answer: c

3. Which of the following statements about Duopoly is correct?
   1. Duopoly is a special case for the Oligopoly market structure
   2. Duopoly is a special case for the Monopsony market structure
   3. Duopoly is a special case for the Monopoly market structure
   4. Duopoly is a special case for the Imperfect Competition

Answer: a

4. Which of the following statements about the Indian Economy is correct?
   1. India follows the Capitalist economic structure
   2. India follows the Socialist economic structure
   3. India follows the Mixed economic structure
   4. None of the above

Answer: c

5. Which of the following statements about the demand curve of a firm under monopoly is true?
   1. The demand curve of a firm under monopoly has a positive relationship between demand and price
   2. The demand curve of a firm under monopoly has an inverse relationship between demand and price
   3. The demand curve of a firm under monopoly has no relationship between demand and price
   4. None of the above

Answer: b

6. Which of the following statements is correct?
   1. The process of charging different prices from different consumers for the same product is called price extension
   2. The process of charging different prices from different consumers for the same product is called price control
   3. The process of charging different prices from different consumers for the same product is called price discrimination
   4. None of the above

Answer: c

7. Which of the following statements is true about the average revenue curve?
   1. The average revenue curve is shaped as a horizontal straight line in a perfect competition
   2. The average revenue curve is shaped as a vertical straight line in a perfect competition
   3. The average revenue curve is shaped downward to the right in a perfect competition
   4. The average revenue curve is shaped rectangular hyperbola in a perfect competition

Answer: a

8. Which of the following statements is accurate?
   1. Under the perfect competition, the marginal revenue and average revenue are indicated by a common rectangular hyperbola
   2. Under the perfect competition, the marginal revenue and average revenue are indicated by a common horizontal straight line
   3. Under the perfect competition, the marginal revenue and average revenue are indicated by a common vertical straight line
   4. Under the perfect competition, the marginal revenue and average revenue are indicated by different lines that are sloping downward

Answer: b

9. Which of the following statements is correct?
   1. When compared to the monopolistic competition, the demand curve of a firm under monopoly is infinitely elastic
   2. When compared to the monopolistic competition, the demand curve of a firm under monopoly is more elastic
   3. When compared to the monopolistic competition, the demand curve of a firm under monopoly is equally elastic
   4. When compared to the monopolistic competition, the demand curve of a firm under monopoly is less elastic

Answer: d

10. Which of the following statements about monopolistic competition is true?
    1. The products sold under monopolistic competition are homogenous
    2. The products sold under monopolistic competition are differentiated
    3. The products sold under monopolistic competition are homogenous but supported with advertisements
    4. The products sold under monopolistic competition are differentiated but supported with advertisements

Answer: c

Also See:

• What Is the Difference Between Selling and Marketing
• Difference Between Economic Growth and Economic Development
• Difference Between Economies of Scale and Economies of Scope
• Difference Between Opportunity Cost and Economic Cost
• Meaning and Impact of Human Capital on Economic Growth