CBSE Class 11 (Commerce) Perfect Competition — practice questions
50 free MCQs with worked solutions. Tap any question for the answer + explanation, or practice them all in the app.
Practice CBSE Class 11 (Commerce) Perfect Competition in the app →In a perfectly competitive market, each individual firm is best described as aWhat do homogeneous products mean here?Under perfect information in a competitive market, who knows all prices?Which assumption says buyers and sellers bear no cost when making an exchange?The no externalities condition means an activity's costs or benefits do not affectIn perfect competition, what do sellers try to maximize?The demand curve facing a single firm in perfect competition isIn the long run, a perfectly competitive firm cannot earnAt long run equilibrium in perfect competition, which profit arises?Normal profit is treated by economists as part of a firm'sWhat does normal profit mainly compensate the owner for?Abnormal profit earned by existing firms in the short run acts as a trigger forWhen new firms enter a profitable competitive industry, market price tends toIn the short run, a firm should keep operating if price exceedsBy shutting down temporarily, a firm avoids all of itsWhy are fixed costs ignored in the short-run shutdown decision?Which statement about exiting an industry is correct?A temporary shutdown by a competitive firm is aEquilibrium in perfect competition occurs where market demand equalsA firm at long run competitive equilibrium receives onlyAllocative efficiency occurs where output makesA profit-maximizing producer in perfect competition faces a price equal to itsProductive efficiency in perfect competition is reached in the long run asWhich two economists formalized perfect competition theory in the 1950s?Who wrote "Monopolistic Competition" in 1933?Which economist wrote "The Economics of Imperfect Competition"?Which market is an example of a very imperfect market?Which markets best approximate perfect competition in the short period?Without externalities or public goods, competitive equilibria are efficient in which sense?Butter and margarine are cited as an example ofWith many buyers and sellers, individuals cannotWell defined property rights in the model determineThe price at which quantity demanded equals quantity supplied is called theIf price is above equilibrium, what results?A rise in disposable income shifts the demand curveBetter technology that raises supply at each price willComparing two static equilibria before and after a change is calledA market that is not in equilibrium is said to be inEconomists such as Samuelson caution against reading what into equilibrium prices?Adam Smith held that markets move toward equilibrium through theAt an equilibrium, no agent has an incentive toA price ceiling is a limit onWhy do governments usually impose price ceilings?A price ceiling set by a manufacturer for its distributors is calledMarket equilibrium is the situation in which supply and demand forces areCompetition laws were created to stop powerful firms fromUnlike competitive firms, monopolists areLong run economic profit depends on the prevalence ofA firm sells 100 units at a price of Rs 12 with average cost Rs 9. Its economic profit isNeoclassical theory defines profit as revenue left after subtracting