Economics Practice Test – Market Structure (Questions with Answers and Explanations)

Which of the following is obtainable in a perfect market? (WASSCE 2010)

(a) P = UR > AR
(b) MR = MC > P
(c) MR < P
(d) P = MR = MC

A market structure where profit is maximized when marginal revenue, marginal cost and price are equal is known as _______ (WASSCE 2011)

A. perfect competition.
B. monopoly.
C. oligopoly.
D. imperfect competition.

Individual markets differs from each other according to _____ (JAMB 2008)

A. the degree of competition
B. the volume of trade
C. the number of buyers
D. its composition

A firm will shut down in the long run if its earning is ______ (WASSCE 2011)

A. less than normal profit
B. greater than normal profit
C. equal to super normal profit
D. less than super normal profit

If a monopolist is incurring short-run losses, this mean that his ____ (JAMB 2009)

A. selling price is above the shot-run marginal cost
B. selling price is below the short-run marginal cost
C. average revenue is greater than marginal revenue
D. average revenue is less than marginal revenue