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AP Intermediate 1st Year Market Equilibrium — practice questions — page 2

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 31–50 of 50.

Higher fixed costs lead a monopolistically competitive market to support:Read the answer and worked solution →At its best output, a monopolistically competitive firm sets price:Read the answer and worked solution →Unused installed capacity under monopolistic competition is called:Read the answer and worked solution →Competition based on subtle product differentiation is called:Read the answer and worked solution →A distinctive feature of oligopoly is:Read the answer and worked solution →Oligopolistic firms often resort to which practice to raise profits?Read the answer and worked solution →An organisation of sellers agreeing on price, output and market share is a:Read the answer and worked solution →Cartels are often unstable because members tend to:Read the answer and worked solution →In a pure oligopoly, the firms' products are:Read the answer and worked solution →Imperfect oligopoly is also known as:Read the answer and worked solution →Prominent entry barriers define which type of oligopoly?Read the answer and worked solution →One firm dominating an oligopolistic industry marks a:Read the answer and worked solution →An oligopoly with no price leader and similar market control is:Read the answer and worked solution →The four-firm concentration ratio measures the share held by:Read the answer and worked solution →Why do oligopolies often prefer promotional efforts to price cuts?Read the answer and worked solution →Which sector is commonly cited as oligopolistic?Read the answer and worked solution →Many countries treat collusion among sellers as:Read the answer and worked solution →A monopolist whose revenue exceeds its costs earns:Read the answer and worked solution →Normal profit is counted as part of a firm's:Read the answer and worked solution →Economic profit in perfect competition attracts:Read the answer and worked solution →

Worked practice questions

Higher fixed costs lead a monopolistically competitive market to support:

  1. Fewer firms
  2. More firms
  3. The same firms
  4. Only one firm
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Correct answer: A. Fewer firms

With greater fixed costs, fewer companies can cover costs at equilibrium.

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At its best output, a monopolistically competitive firm sets price:

  1. Below marginal cost
  2. Equal to zero profit
  3. Above marginal cost
  4. Equal to marginal cost
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Correct answer: C. Above marginal cost

Its downward-sloping demand curve means price exceeds marginal cost where marginal revenue equals marginal cost.

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Unused installed capacity under monopolistic competition is called:

  1. Full capacity
  2. Spare reserve
  3. Excess capacity
  4. Capital deepening
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Correct answer: C. Excess capacity

Every firm's installed capacity is large but not fully used, so output is below the socially desirable level.

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