Test: The Theory of the Firm under Perfect Competition- Assertion & Reason Type Questions

Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Government imposes price floor to protect the interest of the producers.

Reason (R): Price floor makes the goods beneficial for the sellers to sell in the market.

Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Government imposes price ceiling to protect the consumers.

Reason (R): Price ceiling is imposed on essential commodities.

Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant.

Reason (R): When demand increases more than supply, equilibrium price will increase.

Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Reliance has a monopoly in the sector of telecommunication with its Jio in India.

Reason (R): Monopoly is characterised when there is only one seller in the market and the firm is a price maker.

Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Indian Railways is a monopoly sector of the Indian Economy.

Reason (R): There is only one seller of Railways in India that is the Government of India.

Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): By disinvesting in the public sector, there is a fear of monopoly of the economy and there will be only one player Reliance in the market.

Reason (R): Monopoly is the market in which there is a lot of government restriction to ensure that there is minimum exploitation of consumers.

Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Oil Producing Companies have an oligopoly market.

Reason (R): There are only few countries that produce and export crude oil in the whole world.

Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Oligopoly market has few sellers influencing the market.

Reason (R): Oligopoly market is characterised by the presence of few sellers and many buyers.

Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): In oligopoly market, the firms restrict the entry of new firms.

Reason (R): Oligopoly market has few sellers which influence the decisions of the market and restrict the entry of new firms.

Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): The deodorant industry is a monopolistic competitive market.

Reason (R): There are a lot of varieties of deodorants present in the market.

Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): In monopolistic competition, there is a fierce competition between the firms in the market.

Reason (R): In monopolistic competition, there are a large number of sellers and buyers in the market.

Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Monopolistic competition market has free entry and exit of the firms.

Reason (R): There is a presence of non-price competition in the market.