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

1

(a)

Ease of entry into the industry.

(b)

Product differentiation.

(c)

A relatively large number of sellers.

(d)

A homogenous product.

Monopolistic competition differs from perfect competition primarily because______

1

(a)

in monopolistic competition firms can differentiate their products.

(b)

in perfect competition firms can differentiate their products.

(c)

in monopolistic competition entry into the industry is blocked.

(d)

in monopolistic competition there are relatively few barriers to entry.

Under which one of the following forms of market structure does a firm have no control over the price of its product?

1

(a)

Monopoly

(b)

Monopolistic competition

(c)

Oligopoly

(d)

Perfect competition

Price discrimination is one of the features of________

1

(a)

monopolistic competition

(b)

monopoly

(c)

perfect competition

(d)

oligopoly

Average revenue and price are always equal under:

1

(a)

perfect competition only

(b)

Monopolistic competition only

(c)

monopoly only

(d)

all market forms

Under monopoly all firms can sell at any price.

1

(a) True

(b) False

In monopoly, firm is different from industry.

1

(a) True

(b) False

Under monopoly new firms can enter the industry to raise the supply.

1

(a) True

(b) False

Under monopoly a firm sells the goods at a single price.

1

(a) True

(b) False

Under monopolistic competition there is only one seller of the product.

1

(a) True

(b) False

Willmonopolistfirmcontinueto produce in the short run if a loss is incurred at the best short run level of output?

2

(a)

If the monopolist firm incurs loss in the short run, it will stop production in the long run.

Define monopoly.

2

(a)

'Mono'means single and 'poly' means seller, i.e., single seller. Monopoly is a market situation where there is a single firm selling the commodity and there is no close substitute of the commodity sold by the monopolist.

Under which market form, firm is a price-maker?

2

(a)

Monopoly.

What are the shapes of AR and MR curves under monopoly?

2

(a)

Both AR and MR curves slope downwards.

How many firms are there in a monopoly market?

2

(a)

One firm.

Explain why the demand curve facing a firm under monopolistic competition is negatively sloped?

3

(a)

What is the value of MR when the demand curve is elastic?

3

(a)

Why AR curve (demand curve) under monopolistic competition is more elastic than AR curve under monopoly?

3

(a)

Explain the feature of few firms in an oligopoly market.

3

(a)

The market demand curve for a commodity and the total cost for a monopoly firm producing the commodity is given by the schedules below. Use information to calculate the following:

Quantity	0	1	2	3	4	5	6	7	8
Price	52	44	37	31	26	22	19	16	13

Quantity	0	1	2	3	4	5	6	7	8
Total cost	10	60	90	100	102	105	109	115	125

(i) The MR and MC schedules
(ii) The quantities for which the MR and MC are equal
(iii) The equilibrium quantity of output and the equilibrium price of the commodity.
(iv) The total revenue, total cost and total profit in equilibrium.

6

(a)

Compare between perfect competition and monopoly.

6

(a)

Compare between monopoly and monopolistic competition.

6

(a)