MCQ Chapter 5 Market Competition Class 12 Economics

Please refer to Market Competition MCQ Questions Class 12 Economics below. These MCQ questions for Class 12 Economics with answers have been designed as per the latest NCERT, CBSE books, and syllabus issued for the current academic year. These objective questions for Market Competition will help you to prepare for the exams and get more marks.

Market Competition MCQ Questions Class 12 Economics

Please see solved MCQ Questions for Market Competition in Class 12 Economics. All questions and answers have been prepared by expert faculty of standard 12 based on the latest examination guidelines.

MCQ Questions Class 12 Economics Market Competition

Question. Which is a basic for the classification of the market ?
(a) Perfect Competition
(b) Zero Competition (Monopoly)
(c) Imperfect Competition
(d) All the above

Question. In which market product differentiation is found ?
(a) Pure Competition
(b) Perfect Competition
(c) Monopoly
(d) Monopolistic Competition

Question. Which one is a feature of monopoly ?
(a) Single Seller and Many Buyers
(b) Lack of Close Substitutes
(c) Restrictions of New Firm entry
(d) All of these

Question. Which one is a feature of monopolistic competition ?
(a) Differentiated Product
(b) Selling Cost
(c) Imperfect Knowledge of the Market
(d) All the above

Question. What does a monopolist market show ?
(a) Production process
(b) Distribution system
(c) Nature of market
(d) None of these

Question. Which of the following is the feature of pure competition ?
(a) Perfect knowledge of the market
(b) Perfect mobility of factors
(c) Homogenity by products
(d) All the above

Question. The concept of monopolistic competition is given by:
(a) Hicks
(b) Chamberlin
(c) Mrs. Robinson
(d) Samuelson

Question. In which market is AR equal to MR ?
(a) Perfect competition
(b) Oligopoly
(c) Imperfect competition
(d) Monopoly

Question. “Price is determined by Demand and Supply. Whose statement is this ?
(a) Jevons
(b) Walras
(c) Marshall
(d) None of these

Question. What is true for perfect competition market ?
(a) Price is determined by both Demand and Supply Forces
(b) Price is determined by the industry
(c) Each firm of the industry is Price-taker
(d) All the above

Question. How many categories of production duration have been made by Marshall on the basis of supply ?
(a) Two
(b) Three
(c) Four
(d) Seven

Question. Which statement is correct ?
(a) In very short period, supply is perfectly inelastic, price is affected by both demand conditions.
(b) Supply curve elasticity depends on time period
(c) Both (a) and (b)
(d) None of the above

Question. The price of a good is determined by:
(a) Demand
(b) Supply
(c) Both demand and supply
(d) Government

Question. The price of a goods in perfect competition is determined by:
(a) Bargaining
(b) Production cost
(c) Marginal utility
(d) Demand and supply

Question. In very short period, supply will be:
(a) Perfectly elastic
(b) Perfectly Inelastic
(c) Elastic
(d) None of these

Question. In perfect competition, these is……. profit
(a) Normal
(b) Maximum
(c) Zero
(d) None of these

Question. Which determines the equilibrium price ?
(a) Demand
(b) Supply
(c) Both (a) and (b)
(d) None of the above

Question. Price of a goods is determined at a point where :
(a) Demand > Supply
(b) Demand < Supply
(c) Demand = Supply
(d) None of these

Question. Which of the following is correct ?
(a) Labour Demand comes from producer
(b) Demand of labour depends on its productivity.
(c) Marginal productivity of labour is its maximum wage
(d) All the above

Question. The market in which there is free entry and exit is:
(a) Monopolistic competition market
(b) Imperfect competition market
(c) Perfect competitions market
(d) None of these.

Question. According to which economist “Price of a commodity is determined by the forces of demand and supply”:
(a) Jevons
(b) Valros
(c) Marshall
(d) None of these.

Question. Market price is found in:
(a) Short period market
(b) Long period market
(c) Very long period market
(d) None of these.

Questions. Administrative price is:
(a) Price ceiling
(b) Price floor
(c) Both (a) and (b)
(d) None of these.

Questions. Which of the following is the component of instrument pricing:
(a) Rent
(b) Wages
(c) Interest
(d) None of these.

Questions. Which among the following statement is not true:
(a) Demand of labor is done by the producer
(b) Demand of labor depends open its productivity
(c) Marginal productivity of a labor is his maximum wages
(d) All of the above.

Question. Price discrimination is found in which market ?
(a) Pure Competition
(b) Perfect Competition
(c) Monopoly
(d) Monopolistic Competition

Question. A Seller Cannot influence the market price under:
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) All of these

Question. Under which of the following forms of market structure does a firm has no control over the price of its product:
(a) Monopoly
(b) Oligopoly
(c) Monopolistic competition
(d) Perfect competition

Question. ________ and ______ curves tell us about different quantities that are demanded by a consumer at different prices
(a) demand, price
(b) price, supply
(c) demand, supply
(d) supply, output

Question. Buyer demands a commodity because it possesses ______
(a) utility
(b) satisfaction
(c) purchasing power
(d) None of the above

Question. How many categories of production duration have been made by Marshall on the basis of supply ?
(a) Two
(b) Three
(c) Four
(d) Seven

Question. Price of a commodity is determined at a point where :
(a) Demand exceeds
(b) Supply exceeds
(c) Demand equals supply
(d) None of these

Question. Minimum support price of wheat is called:
(a) Price ceiling
(b) Price floor
(c) Market price
(d) Equilibrium price.

Question. After reaching the saturation point, consumption of additional units of the commodity cause:
(a) Total utility to fall and marginal utility to increase.
(b) Total utility and marginal utility both to increase.
(c Total utility to fall and marginal utility to become negative.
(d) Total utility to become negative and marginal utility to fall.

Question. The market in which there is free entry and exit is:
(a) Monopolistic competition market
(b) Imperfect competition market
(c) Perfect competitions market
(d) None of these.

Question. When a firm’s Total Revenue=Total Cost, it cannot cover its normal profit
(a) False
(b) True
(c) Can’t say
(d) None of these

Question. The price at which Quantity Demanded = Quantity Supplied is
(a) Market Price
(b) Equilibrium Price
(c) Consumer’s Price
(d) Supply Price

Question. In very short period, supply will be:
(a) Perfectly elastic
(b) Perfectly Inelastic
(c) Elastic
(d) None of these

Question. The price of a good is determined by:
(a) Demand
(b) Supply
(c) Government 
(d) Both demand and supply

Question. When the price equals the equilibrium price and quantity bought and sold equals the equilibrium quantity, is called
(a) Consumer equilibrium
(b) Market equilibrium
(c) Mechanized equilibrium
(d) Suppliers’ Equilibrium

Question. Equilibrium price is also called as ______ price
(a) ideal
(b) optimum
(c) supply-demand
(d) market clearing

Question. Which of the following is not a feature of perfect competition ?
(a) Large number of buyers and sellers
(b) Homogeneity of product
(c) Perfect knowledge of the market 
(d) Advertisement and selling cost 

Question. When the demand curve is perfect elastic,
(a) increase in supply leads to decrease in quantity bought and sold
(b) decrease in supply leads to increase in quantity bought and sold
(c) Both a and b
(d) None of the above

Question. When demand curve shifts to the right, competition among producers and consumers cause price to
(a) rise
(b) fall
(c) remain constant
(d) none of the above

Question. Which is a characteristic of the market ?
(a) One Area
(b) Presence of both Buyers and Sellers
(c) Single Price of the Commodity
(d) All the above

Question. Administrative price is:
(a) Price ceiling
(b) Price floor
(c) Both (a) and (b)
(d) None of these.

Question. Which among the following statement is not true:
(a) Demand of labor is done by the producer
(b) Demand of labor depends open its productivity
(c) Marginal productivity of a labor is his maximum wages
(d) All of the above.

Question. If supply remains constant, a Leftward Shift in demand curve will lead to
(a) fall in equilibrium price and quantity bought
(b) rise in equilibrium price and quantity bought
(c) fall in equilibrium price but increase in demand
(d) fall in demand but increase in price of good

Question. Given, AR = 5 and Elasticity of demand = 2 Find MR.
(a) +2.5
(b) -2.5
(c) +1.5
(d) +2.0

Question. Which of the following market types has a large number of firms that sell similar but slightly different products?
(a) perfect competition
(b) oligopoly
(c) monopolistic competition
(d) monopoly

Question. In a perfectly competitive market, the type of decision a firm has to make is different in the short run than in the long run. Which of the following is an example of a perfectly competitive firm’s short-run decision?
(a) what price to charge buyers for the product
(b) whether or not to enter or exit an industry
(c) the profit-maximizing level of output
(d) how much to spend on advertising and sales promotion

Question. In which market product differentiation is found ?
(a) Pure Competition
(b) Perfect Competition
(c) Monopoly
(d) Monopolistic Competition

Question. Which one is a feature of monopolistic competition ?
(a) Differentiated Product
(b) Selling Cost
(c) Imperfect Knowledge of the Market
(d) All the above

Question. What does point A represent
(a) Excess Supply
(b) Shortage in Demand
(c) None of the above
(d) Both a and b

Question. _____ is a system of distribution of a specified quantity of a product at price fixed by the government
(a) Black Market
(b) Allocation by Seller’s Preference
(c) Rationing
(d) First come, first serve

Question. What should a firm do when Marginal revenue is greater than marginal cost?
(a) Firm should expand output
(b) Effect should be made to make them equal
(c) Prices should be covered down
(d) All of these

Question. Market which have two firms are known as:
(a) Oligopoly
(b) Duopoly
(c) Monopsony
(d) Oligopsony

Question. In perfect competition, since the firm is a price taker, the _______ curve is a straight line:
(a) Marginal cost
(b) Total cost
(c) Total revenue
(d) Marginal revenue

Question. When demand curve is parallel to the X-axis, an increase in supply leads to a ______
(a) decrease in quantity demanded
(b) increase in quantity demanded and sold
(c) change in price
(d) none of the above

Question. Price of a goods is determined at a point where :
(a) Demand > Supply
(b) Demand < Supply
(c) Demand = Supply
(d) None of these

Question. Not a condition of equilibrium of monopoly firm:
(a) Average revenue = Marginal revenue
(b) Marginal revenue = Marginal cost
(c) Marginal cost curve cuts marginal revenue curve from downwards.
(d) Both (b) and (c).

Question. When the price is 1000, what must happen to the quantity demanded for it to achieve equilibrium
(a) it should remain the same
(b)it should decrease
(c) it should increase
(d) none of the above

Question. Which of the following statements is correct?
(a) The market demand and the firm’s demand are the same for a monopoly.
(b) Monopolies have perfectly inelastic demand for the product sold.
(c) Monopolies are guaranteed to earn an economic profit.
(d) All of the above are correct.

Question. Marketing consists of what?
(a) selling at a lower price than rivals sell for
(b) producing more output to lower average costs
(c) advertising and packaging
(d) None of the above answers are correct.

Question. Which barrier to entry is an exclusive right granted to the author or composer of a literary, musical, dramatic or artistic work?
(a) government license
(b) patent
(c) public franchise
(d) copyright

Question. Which of the following four-firm concentration ratios would be the best indication of a perfectly competitive industry?
(a) 100 percent
(b) 78 percent
(c) 0.25 percent
(d) 31 percent

Question. If you have found the percentage of the value of sales accounted for by the four largest firms in an industry, you have found the
(a) elasticity of supply value.
(b) Herfindahl-Hirschman Index.
(c) elasticity of demand value.
(d) four-firm concentration ratio.

Question. In a perfectly competitive market, the type of decision a firm has to make is different in the short run than in the long run. Which of the following is an example of a perfectly competitive firm’s long-run decision?
(a) what price to charge buyers for the product
(b) how much to spend on advertising and sales promotion
(c) the profit-maximizing level of output
(d) whether or not to enter or exit an industry

Question. If the technology for producing a good enables one firm to meet the entire market demand at a lower price than two or more firms could, then that firm has
(a) a legal barrier to entry.
(b) a natural monopoly.
(c) increasing average total costs.
(d) patented the market.

Question. Tghe low of equi marginal utility considers price of money as:
(a) Zero
(b) less than one
(c) more than one
(d) one

Question. Price ceiling is imposed on goods like
(a) wheat
(b) oil
(c) rice
(d) all of the above

Question. ______ is a place where goods are sold illegally at prices higher than a legally fixed price by the government
(a) White bazaar
(b) Black Market 
(c) Ration Market
(d) Piracy market

Question. At what price is the ceiling price set
(a) OP1
(b) OP2
(c) OP3
(d) None of the options

Question. When economists speak of the utility of a certain good, they are referring to:
(a) the demand for the good
(b) the usefulness of the good in consumption
(c) the satisfaction gained from consuming the good
(d the rate at which consumers are willing to exchange one good for another

Fill in the blanks:

Question. Price discrimination is possible in ……………….. market.
Answer: Monopolistic

Question. If the supply of any good remains unchanged, and with the increase in demand its ……………….. increases.
Answer: Increase

Question. Price ceiling is done by the ………………..
Answer: Government

Question. In ………………..market there should be two or more two firms.
Answer: Oligopoly

Question. The market for petrol is ………………..
Answer: International.

Question. The other name of minimum determined price is ………………..
Answer: Price floor

Question. ………….. presented FAD principle.
Answer: Prof. Amartya Sen

State true or false:

Question. Normal price is imaginary.
Answer: True

Question. The forces of demand and supply remains in the state of equilibrium for a long period.
Answer: False

Question. Under perfect competition firms themselves determine the price.
Answer: False

Question. Main objective of price range determination is to earn profit.
Answer: False

Question. In independent market system, prices of goods and services are determined by the forces of demand and supply.
Answer: True

Match the following:

Question.

‘A’	‘B’
1. Price range	(a) Excess supply
2. Price floor	(b) Public Distribution System
3. Problem of price floor	(c) Minimum wage provision.

Answer:

‘A’	‘B’
1. Price range	(b) Public Distribution System
2. Price floor	(c) Minimum wage provision.
3. Problem of price floor	(a) Excess supply