Forms of Market and Price Determination Quiz
Are you aware of the market and price? Take this quiz on the forms of market and price determination. If you understand this concept well, this quiz will be perfect for your practice. You simply need to pick the correct answers about the forms of market and price determination. Along with testing your knowledge, you can enhance it too. Give this quiz a try, and see how much you score. You must try to get 100% on this quiz. All the best!
Questions and Answers
- 1.
Which of the following options signifies a 'perfect competition'?
- A.
Each firm earns normal profits, and no firm can earn super-normal profits.
- B.
There is perfect information and knowledge.
- C.
All firms produce identical or homogeneous products.
- D.
All of the above
Correct Answer
D. All of the aboveExplanation
A perfect competition is characterized by several factors. Firstly, each firm in a perfect competition earns normal profits, meaning that they cover all their costs but do not make any extra profits. Secondly, there is perfect information and knowledge, meaning that all buyers and sellers have access to the same information about prices, quality, and other market conditions. Lastly, all firms in a perfect competition produce identical or homogeneous products, meaning that there is no differentiation between the products offered by different firms. Therefore, the answer "All of the above" signifies a perfect competition as it includes all the characteristics mentioned.Rate this question:
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- 2.
Which type of market structure has Duopoly as the special case?
- A.
Imperfect competition
- B.
Monopsony
- C.
Oligopoly
- D.
Monopoly
Correct Answer
C. OligopolyExplanation
Oligopoly is a type of market structure where a few large firms dominate the market. Duopoly is a special case of oligopoly where there are only two firms in the market. In a duopoly, these two firms have significant control over the market and can influence prices and competition. Therefore, the correct answer is Oligopoly.Rate this question:
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- 3.
Which of the following is one of the essential conditions of "perfect competition"?
- A.
Same price for the same things at one time
- B.
Multiplicity of prices for the same products at one time
- C.
Many sellers and a few buyers
- D.
Product differentiation
Correct Answer
A. Same price for the same things at one timeExplanation
One of the essential conditions of "perfect competition" is that there is the same price for the same things at one time. In a perfectly competitive market, all firms sell identical products at the same price. This condition ensures that there is no room for price discrimination or differentiation among sellers. It creates a level playing field for all market participants and allows for efficient allocation of resources.Rate this question:
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- 4.
What kinds of markets are popularly known as 'haats' and 'shandies'?
- A.
Global
- B.
National
- C.
Urban
- D.
Rural
Correct Answer
D. RuralExplanation
Haats and shandies are popularly known as rural markets. In rural areas, these markets are commonly found where local vendors gather to sell a variety of goods such as agricultural produce, handicrafts, livestock, and other daily essentials. These markets play a significant role in the rural economy by providing a platform for small-scale traders and farmers to sell their products and meet the local demand. Haats and shandies are an integral part of rural life and contribute to the socio-economic development of rural communities.Rate this question:
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- 5.
Which of the following suits the best about Oligopoly?
- A.
A Barber Shop
- B.
A Welding Shop
- C.
A Cigarette Industry
- D.
Wheat growing Farmers
Correct Answer
A. A Barber ShopExplanation
Oligopoly refers to a market structure where a few large firms dominate the industry. In the case of a barber shop, it is unlikely to be an oligopoly as there are typically numerous small, independent barber shops operating in a local area. Oligopolies are more commonly found in industries such as cigarette manufacturing, where a few major companies control a significant portion of the market. Therefore, A Barber Shop does not suit the best as an example of an oligopoly.Rate this question:
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- 6.
What is it called in a market economy when only those consumer goods will be produced that are in demand?
- A.
Socialism
- B.
Communism
- C.
Capitalism
- D.
Mixed economy
Correct Answer
C. CapitalismExplanation
In a market economy, only those consumer goods that are in demand are produced. This is because in capitalism, the production and distribution of goods and services are determined by the demand and supply in the market. Therefore, the correct answer is capitalism.Rate this question:
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- 7.
Who among the following buys a large number of goods from the manufacturer for further sale?
- A.
Distributor
- B.
Retailer
- C.
Middlemen
- D.
Wholesaler
Correct Answer
D. WholesalerExplanation
A wholesaler is a person or company that buys goods in large quantities directly from the manufacturer and sells them to retailers or other businesses. They act as intermediaries between the manufacturer and the retailer, purchasing goods in bulk at a discounted price and then distributing them to smaller businesses or retailers. Therefore, a wholesaler is the correct answer as they buy a large number of goods from the manufacturer for further sale.Rate this question:
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- 8.
Which of the following institutions recommend a Minimum Support Price?
- A.
Commission for Agricultural Costs And Prices
- B.
Ministry of Food and Agriculture
- C.
Food Corporation of India
- D.
Food and Agriculture Organization
Correct Answer
A. Commission for Agricultural Costs And PricesExplanation
The Commission for Agricultural Costs And Prices recommends a Minimum Support Price. This is a government body in India that advises the government on the pricing policy for major agricultural commodities. The Minimum Support Price is the price at which the government purchases crops from farmers to ensure they receive a fair and remunerative price for their produce. The other institutions listed, such as the Ministry of Food and Agriculture, Food Corporation of India, and Food and Agriculture Organization, may play a role in the agricultural sector but do not specifically recommend a Minimum Support Price.Rate this question:
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- 9.
What is used to monitor the changes in living costs over time?
- A.
GDP defaulter
- B.
Producer Price Index (PPI)
- C.
Wholesale Price Index (WPI)
- D.
Consumer Price Index (CPI)
Correct Answer
D. Consumer Price Index (CPI)Explanation
Consumer Price Index (CPI) is used to monitor the changes in living costs over time. It measures the average price change of a basket of goods and services that are commonly consumed by households. By tracking the CPI, economists and policymakers can assess the inflation rate and make informed decisions regarding monetary policy, wage adjustments, and social welfare programs. The CPI provides valuable insights into the purchasing power of consumers and helps in understanding the impact of price changes on the overall economy.Rate this question:
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- 10.
Which of the following correctly describes the US's economical nature?
- A.
Socialist
- B.
Capitalist
- C.
Mixed
- D.
None of the above
Correct Answer
C. MixedExplanation
The correct answer is "Mixed." This means that the US has a combination of both socialist and capitalist elements in its economy. While the US operates under a predominantly capitalist system, there are also various social welfare programs and government regulations in place to provide support and protection for its citizens. This combination of free-market capitalism and government intervention makes the US economy a mixed one.Rate this question:
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Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.
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Current Version
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Aug 16, 2023Quiz Edited by
ProProfs Editorial Team -
Nov 10, 2022Quiz Created by
Sophia Smith
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