Chapter MCQ Test 2 — Perfect Competition and Price Determination

A single farmer in a huge wheat market cannot change the wheat price because perfect competition has:

At a price above equilibrium, the resulting surplus pushes the price:

A bad harvest shifts the supply of onions left while demand is unchanged. The equilibrium price will:

A government fixes the price of a medicine below its equilibrium to keep it affordable. A likely result is:

The MSP guarantees farmers a price above the market level. To prevent unsold surplus harming farmers, the government usually:

Both an increase in demand and an increase in supply raise the equilibrium quantity, but they affect price differently: demand up raises price while supply up:

A price ceiling only causes a shortage if it is set:

Free entry of firms in perfect competition means that, if existing firms earn high profits, new firms will:

If both demand and supply rise by the same amount, the equilibrium quantity rises and the equilibrium price:

The whole point of demand–supply analysis is shown by price controls: a ceiling helps ____ and a floor helps ____.