Question : The study of market structures, such as perfect competition and monopoly, is a part of:
Option 1: Microeconomics
Option 2: Macroeconomics
Option 3: Econophysics
Option 4: Environmental economics
Correct Answer: Microeconomics
Solution : The correct answer is (a) Microeconomics.
Microeconomics examines the behavior and interactions of individual economic units, including firms, within specific markets. The study of market structures falls under the domain of microeconomics. It analyzes different types of market structures, such as perfect competition, monopoly, oligopoly, and monopolistic competition. Microeconomics explores how these market structures affect the behavior of firms, pricing decisions, entry and exit barriers, market power, efficiency, and the distribution of resources. Understanding market structures is crucial for analyzing market outcomes and evaluating the impact of market behavior on consumer welfare and economic efficiency.
Question : Match the characteristics with their market structure:
(a) Difficult entry (often due to economies of scale)
(b) Can sell as much as it can at the market price
(a) Marginal Cost (MC) = Market Price(MR)
(b) The firm will tend to set output to earn maximum profit.
Question : The situation in which total Revenue equals total cost, is known as :
Question : The equilibrium of a firm under perfect competition will be determined when:
Question : Statement 1: Liberalization of the financial sector in India aimed to promote competition among banks.
Statement 2: The Reserve Bank of India (RBI) was abolished as part of financial sector reforms.
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