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AP Intermediate 1st Year Market Equilibrium — practice questions

Explore 50 free Market Equilibrium questions in AP Intermediate 1st Year Economics. Open each question or exercise to read its content, reference answers and available explanation.

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Market Equilibrium questions and exercises with answers

Showing questions 1–30 of 50.

How many sellers does a monopoly market have?Read the answer and worked solution →In which market structure does pricing control rest with a few sellers?Read the answer and worked solution →Under perfect competition, the products of different sellers are:Read the answer and worked solution →A firm in perfect competition is a:Read the answer and worked solution →In long-run perfect competition, firms earn only:Read the answer and worked solution →A profit-maximising firm in perfect competition sets price equal to:Read the answer and worked solution →Allocative efficiency in perfect competition occurs where:Read the answer and worked solution →Butter and margarine are an example of:Read the answer and worked solution →Perfect competition assumes that buyers and sellers have:Read the answer and worked solution →An individual seller in perfect competition cannot change the price because:Read the answer and worked solution →Which kind of firm has no supply curve because it is not a price taker?Read the answer and worked solution →A profit-maximising monopolist chooses output where:Read the answer and worked solution →A monopolist is best described as a:Read the answer and worked solution →Which index is used to estimate the market power of a firm?Read the answer and worked solution →Falling unit costs at larger output are called:Read the answer and worked solution →A pure monopolist sells a good that has:Read the answer and worked solution →The lack of substitutes makes demand for a monopolist's product:Read the answer and worked solution →The demand curve a monopolist faces is the:Read the answer and worked solution →If a monopolist raises its price, its sales volume will:Read the answer and worked solution →A discriminating monopolist sells at a lower price in the market with:Read the answer and worked solution →Charging different buyers different prices for the same good is:Read the answer and worked solution →Heavy capital needs that limit the number of firms act as a:Read the answer and worked solution →How many basic market structures does traditional analysis recognise?Read the answer and worked solution →Which market structure has many sellers of differentiated products?Read the answer and worked solution →A firm in monopolistic competition earns only what in the long run?Read the answer and worked solution →Advertising and publicity expenses of a firm are called:Read the answer and worked solution →Entry and exit in monopolistic competition are:Read the answer and worked solution →New firms enter a monopolistically competitive market when existing firms earn:Read the answer and worked solution →Firms suffering losses in monopolistic competition tend to:Read the answer and worked solution →Cross price elasticity between goods in monopolistic competition is:Read the answer and worked solution →

Worked practice questions

How many sellers does a monopoly market have?

  1. Exactly one seller
  2. A few large sellers
  3. Many small sellers
  4. Two rival sellers
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Correct answer: A. Exactly one seller

A monopoly is defined by a single supplier that serves the whole market, so the firm and the industry coincide.

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In which market structure does pricing control rest with a few sellers?

  1. Perfect competition
  2. Oligopoly structure
  3. Natural monopoly
  4. Monopolistic rivalry
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Correct answer: B. Oligopoly structure

Oligopoly means a handful of firms hold most of the pricing power in the market.

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Under perfect competition, the products of different sellers are:

  1. Branded and distinct
  2. Slightly differentiated
  3. Homogeneous and identical
  4. Unique to each seller
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Correct answer: C. Homogeneous and identical

Products are perfect substitutes, so quality does not vary between suppliers.

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How to practise

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