Assumptions about Perfectly Competitive Markets

Q.

What are the 5 characteristics of perfect competition?

Q.

Write the difference between market and non-market activities?

Q.

Which of the following is not a characteristic of monopolistic competition?

1. Ease of entry into the industry.

2. Product differentiation.

3. A relatively large number of sellers.

4. A homogeneous product.

Q.

Selecting which segments of a potential market to serve is called:

Q.

How many types of markets are there?

Q. Which of the following is not a characteristic feature of perfect competition?

1. Customers have no purchasing power.
2. All the seller sells at same price.
3. All the products are homogenous.
4. Customers have no bargaining power.

Q. Which of the following is not a characteristic of perfect competition?

1. Large number of firms
2. Perfect mobility of factors
3. Informative advertising to ensure that consumers have good information
4. Freedom of entry and exit into and out of the market

Q. Perfect competition is an ideal but not a real market situation.

1. True
2. False

Q. The government, consumer or a researcher will have ______________.

1. Monetary stakes
2. Non monetary stakes
3. Interest stakes
4. All of the above

Q. A condition needed for perfectly competitive industry to exist is that ________.

1. buyers are able to influence the price of the commodity
2. each unit of commodity is considered by buyers to be differentiated
3. buyers discriminate in their purchases based on non-price factors
4. there are no obstacles to the free mobility of resources

Q. Which of the following is not a characteristic of a competitive market?

1. There are many buyers and sellers in the market.
2. Firms generate small but positive super normal profits in the long run.
3. Firms can freely enter or exit the market.
4. The goods offered for sales are largely the same

Q. Any point beyond PPF curve can be attained by _______.

1. technological innovation
2. increasing supply of factor inputs
3. both (A) and (B)
4. none of the above

Q. In monopolistic competition, firms achieve some degree of market power _________________.

1. by virtue of size alone
2. by producing differentiated products
3. because of barriers to exit from the industry
4. many interdependent industry produce a homogenous product

Q. Under ________ market condition, firms in the industry make only normal profit in the long run.

1. perfect competition
2. monopoly
3. oligopoly
4. all of above

Q. Price-taking firms, i.e., firms that operate in a perfectly competitive market, are said to be small relative to the market. Which of the following best describes this smallness?

1. The individual firm must have fewer than 10 employees.
2. The individual firm faces a downward-slopping demand curve.
3. The individual firm has assets of less than 20 lakh.
4. The individual firm is unable to affect market price through its output decisions.

Q. The distinction between a single firm & an Industry vanishes in which of the following market condition.

1. Monopoly.
2. Perfect competition.
3. Monopolistic competition.
4. Imperfect competition.

Q. why can firm not get abnormal profits under perfect competitions for long run

Q. What is the meaning of market forces of supply and demand?

Q. There is no difference between firm and industry in the case of _______.

1. pure oligopoly
2. pure monopoly
3. perfect competition
4. duopoly

Q. Graphically the curve for autonomous investment is given by a _____________________.

1. upward sloping curve
2. horizontal line parallel to X axis
3. vertical line parallel to Y axis
4. downward sloping curve