Price Determination in Different Markets

20 Practice MCQs available for CA Foundation

Paper

Paper 4: Business Economics

Exam Weightage

15%

Key Topics

Perfect Competition, Monopoly, Monopolistic, Oligopoly

This high-weightage chapter covers all four market structures: Perfect Competition, Monopoly, Monopolistic Competition, and Oligopoly. Students learn how price and output are determined under each structure, along with key concepts like Price Discrimination, Kinked Demand Curve, and the conditions of equilibrium (MR = MC).

Exam Strategy Tip

This chapter carries the highest weightage (~15%). Focus on features of each market, the shape of AR and MR curves, and understand why firms in Perfect Competition are 'Price Takers' while Monopolists are 'Price Makers'.

Key Terms

Index Number

A statistical device for measuring changes in the magnitude of a group of related variables (like prices or production) over time.

Elasticity of Demand

A measure of responsiveness of quantity demanded to a change in price.

Inflation

General increase in prices and fall in purchasing value of money.

Equilibrium Price

Price where quantity supplied equals quantity demanded.

FIFO (First In First Out)

An inventory valuation method that assumes the goods purchased or manufactured first are sold or used first. As a result, closing stock is valued at the most recent (latest) purchase prices.

Comparison Tables

Fixed Cost vs Variable Cost: Cost ConceptsTrading Account vs P&L Account: Final Accounts ExplainedSLM vs WDV Depreciation: CA Foundation Accounts

All 20 Questions

61
Which of the following is not a characteristic of a "Price Taker"?
MCQ
62
Which of the following is not an essential condition of pure competition?
MCQ
63
Under which of the following forms of market structure does a firm have no control over the price of its product?
MCQ
64
Kinked demand curve hypothesis is designed to explain in context of oligopoly
MCQ
65
Price discrimination will be profitable only if the elasticity of demand in different markets is:
MCQ
66
In the long run, a firm in a perfectly competitive market earns:
MCQ
67
Which market structure has a "kinked demand curve"?
MCQ
68
Under Monopoly, price discrimination depends upon:
MCQ
69
The structure of the cold drink industry in India is best described as:
MCQ
70
A firm encounters its "shutdown point" when:
MCQ
71
OPEC is an example of:
MCQ
72
In which market form, new firms are barred from entering the market?
MCQ
73
Which of the following is NOT a feature of Monopolistic Competition?
MCQ
74
When AR = Rs. 10 and AC = Rs. 8, the firm makes:
MCQ
75
Toothpaste industry is an example of:
MCQ
76
Under perfect competition, price is determined by:
MCQ
77
Monopsony means:
MCQ
78
Cartels are a feature of:
MCQ
79
Product differentiation is a key feature of:
MCQ
80
Under monopoly, MR curve lies:
MCQ

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