12 Questions
What is the main focus of microeconomics?
Studying individual markets and decision-making units
Which of the following is a factor that determines demand in microeconomics?
Price of the product
According to the law of demand, what happens as the price of a product increases?
Quantity demanded decreases
Which of the following is a factor that influences supply in microeconomics?
Price of the product
Where does equilibrium price and quantity occur in a market?
Demand equals supply
In a perfectly competitive market, which of the following is expected?
Homogeneous products and many buyers and sellers
In monopolistic competition, firms differentiate their products to:
Increase price-setting power
If a monopolistically competitive firm is making economic profit in the short run, what will happen in the long run?
New firms will enter the market, reducing profit
What is a key difference between an oligopoly and monopolistic competition?
Number of firms in the market
Why do monopolies have price-setting power?
Since they are the sole producers of a good or service
What happens to a firm's economic profit in a perfectly competitive market in the long run?
Economic profit is driven to zero
Why is a cartel considered an example of imperfect competition?
As it involves price collusion among firms
Test your knowledge on microeconomics concepts including primary concerns, determinants of demand, and the law of demand. Multiple-choice questions cover topics such as individual markets, decision-making units, and price effects on quantity demanded.
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