B.Com Microeconomics: Perfect Competition, Monopoly, Monopolistic Competition
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Questions and Answers

Which of the following is a characteristic of perfect competition in the short run?

  • Firms face a perfectly elastic demand curve (correct)
  • Firms can easily enter or exit the market
  • Firms produce differentiated products
  • Firms have complete control over the market price

    • What is the main difference between a monopoly and a perfectly competitive market?

  • A monopoly has a single seller, while perfect competition has many sellers
  • A monopoly produces differentiated products, while perfect competition produces homogeneous products
  • A monopoly faces a perfectly inelastic demand curve, while perfect competition faces a perfectly elastic demand curve
  • All of the above (correct)

    • In monopolistic competition, what is the relationship between average revenue and marginal revenue?

  • The relationship depends on the elasticity of demand (correct)
  • Average revenue is always equal to marginal revenue
  • Average revenue is always greater than marginal revenue
  • Marginal revenue is always greater than average revenue

    • According to the theory of marginal productivity, what determines a factor's wage or rent?

    <p>The factor's marginal product</p> Signup and view all the answers

    What is the main limitation of the Ricardian theory of rent?

    <p>It assumes land is homogeneous</p> Signup and view all the answers

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