Classical

Business Economics - Business Economics Objective Type Questions

36:  
Consider the following
1. Large number of buyers and sellers
2. Firms produce differentiated products
3. Free entry and exit of firms
4. Perfect knowledge abouttechnology.
Which of the above are the characteristics of monopolistic competition?
A.

1 and 3

B.

2 and 3

C.

2,3 and 4

D.

1,2,3 and 4

 
 

Option: D

Explanation :

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37:  
The degree of monopoly power can be measured by the formula
A.

(P - MC) / P

B.

MR / (AR - MR)

C.

AR / (AR - MR)

D.

(AR -MR ) / MR

 
 

Option: A

Explanation :

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38:  
Under monopoly and imperfect competition, MC is
A.

Equal to the price

B.

Less than the price

C.

More than the price

D.

Any of the above

 
 

Option: B

Explanation :

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39:  
The value of  σ for Cobb-Douglas production function is
A.

B.

0

C.

1

D.

-1

 
 

Option: C

Explanation :

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40:  
Given that cost conditions are same, in monopolistic competition price is ...... and output is ........ as compared to perfect competition.
A.

Higher, same

B.

Same, lower

C.

Higher, lower

D.

Lower, higher

 
 

Option: C

Explanation :

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