Market Structures
Economics · 50 practice questions
Perfectly competitive markets — assumptions, characteristics, short-run and long-run equilibrium; imperfect markets — pure monopoly, discriminatory monopoly, monopolistic competition, and their equilibrium positions; break-even/shut-down analysis.
- Analyse the assumptions and characteristics of perfectly competitive and imperfect markets.
- Differentiate between short-run and long-run equilibrium of firms in each.
- Establish the conditions for the break-even/shut-down of firms.
Try a few questions
- Practice question 1
At the break-even output found above (20 units, price ₦25), total revenue equals total cost at
- A.₦300
- B.₦200
- C.₦500
- D.₦450
Show the answer
C. ₦500
TR = TC = 25 × 20 = 500 at break-even.
- Practice question 2
High start-up capital requirements acting as a barrier to entry mainly help explain the persistence of
- A.monopoly power in a market
- B.perfect competition in a market
- C.zero economic profit for all firms
- D.unlimited entry of new firms
Show the answer
A. monopoly power in a market
High entry barriers keep out rivals, sustaining monopoly power.
- Practice question 3
A key assumption of perfect competition is that all firms in the industry sell
- A.a highly differentiated, branded product
- B.a homogeneous (identical) product
- C.a product that is unique to a single seller
- D.products with no close substitutes whatsoever
Show the answer
B. a homogeneous (identical) product
Identical products are a defining assumption of perfect competition.
More UTME Economics topics
Practise with instant feedback
Answer questions one at a time and see the right answer and the reason straight away. Free to start.
Start practising