24 Compared to consumers in monopoly, consumers in perfect compettion are becaus

Question

24 Compared to consumers in monopoly, consumers in perfect compettion are because in a competitive market a prices are lower and quantity is lower b prices are lower and quantity is higher c prices are higher and quantity is higher d. thero is more variety in consumption bundle 25. The following are characteristics of a firm in monopolistic competition a. Many sellers Ability to differentiate product by advertising and sales promotions Profits can exist in the short run. b. c. d. No firm can influence price 26. Which one of the following is an example of farm pr oblem? a. The foxity of farm assets b. Inelastic demand and a bumper crop c. lack of market power d. interest sensitivity e. all of the above 27. The following are examples of firms under monopolistic competition. Which one is not? a. Coke and Pepsi b. McDonald's c. Farm machinery manufacturers d. Subway e. Starbucks 28. The following are characteristics of a monopolist. Which one is not? a. Have absolute power over setting market price b. Charge only one single price c. Produce a unique product d. Only seller in the market Use the diagram below to answer questions 29 and 30 LESS MORE Perfect Competition Competition Monopolistic Oligopoly Monopoly MANY ONE

Explanation / Answer

Ans 24 - There is more variety in consumption bundle. In a competitive market there are large number of sellers offering the same product.

Ans 25 - No firm can influence price. In monopolistic competition every firm can influence price as they offer differentiated homogenous products.

Ans 26 - All of the above are examples of farm problem.

Ans 27 - Farm machinery manufacturers. Under monopolistic competition the firms differentiate their products in many ways like brand name, appearance, fragrance, color etc. All the other options offer differentiated products under brand name.

Ans 28 - Charge only one single price. A monopolist firm can charge different price to different segments of consumers to maximize its profits.

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