Micro

Forms of Market

Medium

Match List-I with List-II

List-I List-II
(A) Upper limit on price of goods & services (I) Leads to excess supply.
(B) Free entry and exit (II) Equilibrium price = min AC of the firms.
(C) Marginal revenue product of labor (MRP_L) (III) Leads to excess demand.
(D) Lower limit on price of goods & services (IV) MR x MP_L.

Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (III), (B) - (II), (C) - (IV), (D) - (I)

(A) - (IV), (B) - (III), (C) - (II), (D) - (I)

(A) - (IV), (B) - (III), (C) - (I), (D) - (II)

List-I	List-II
(A) Upper limit on price of goods & services	(I) Leads to excess supply.
(B) Free entry and exit	(II) Equilibrium price = min AC of the firms.
(C) Marginal revenue product of labor (MRP_L)	(III) Leads to excess demand.
(D) Lower limit on price of goods & services	(IV) MR x MP_L.

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (III), (B) - (II), (C) - (IV), (D) - (I)

(A) - (IV), (B) - (III), (C) - (II), (D) - (I)

(A) - (IV), (B) - (III), (C) - (I), (D) - (II)

✅ Correct Option: 2

Option 1 -> (A)-(I) is incorrect because upper limit on price (price ceiling) leads to excess demand, not supply.

Option 2 -> (A)-(III): Price ceiling causes excess demand; (B)-(II): Free entry/exit results in P=min AC in long run; (C)-(IV): MRP_L = MR × MP_L; (D)-(I): Price floor causes excess supply.

Option 3 -> (A)-(IV) is incorrect because upper limit on price is not related to MR × MP_L formula.

Option 4 -> (A)-(IV) is incorrect because upper limit on price is not related to MR × MP_L formula.

Hence, Option 2: (A) - (III), (B) - (II), (C) - (IV), (D) - (I) -> (A) Price ceiling (upper limit) creates shortage as consumers demand more at lower prices; (B) Free entry/exit in perfect competition ensures zero economic profit where P = minimum AC in long run; (C) MRP_L is calculated by multiplying marginal revenue with marginal product of labor; (D) Price floor (lower limit) creates surplus as suppliers produce more at higher prices but demand falls -> correct

2026: 20 May Shift 1

Identify the correct statements from the following in the context of normal profit and break-even point (BEP).

(A) BEP is the point at which a firm earns only normal profit.

(B) A perfectly competitive firm earns normal profit in long run.

(D) Profit level that keeps a firm in the existing business is called normal profit.

Choose the correct answer from the options given below:

2025: 22 May Shift 1

Perfect information implies that all buyers and all sellers are completely informed about the price, quality and other relevant details about the product, as well as the market. These features result in the single most distinguishing characteristic of perfect competition, that is...

2025: 16 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Excess demand	(I) Supernormal profits
(B) Excess supply	(II) Perfect competition
(C) Entry of new firms in the market	(III) Price tends to fall
(D) Price taker	(IV) Price tends to rise

Choose the correct answer from the options given below:

2025: 31 May Shift 1

Select the INCORRECT feature of the market with respect to perfect competition.

The market consists of a large number of buyers and sellers.
Entry into the market as well as exit from the market are free for firms.
Buyers are price makers.
There is perfect knowledge.

2026: 13 May Shift 2

Suppose the market for cricket balls is perfectly competitive. When the price of a cricket ball is Rs 20, let us assume that 400 cricket balls are supplied by the firms in the market. When the price of a cricket ball rises to Rs 60, let us assume that 2,000 cricket balls are supplied in aggregate by the firms in the market. What will be the value of price elasticity of supply?

2025: 29 May Shift 2

In a perfectly competitive market choose the correct statement from the following.

(A) Equilibrium occurs where market demand equals market supply.

(B) Each firm employs labour upto the point where the marginal revenue of labour equals the wage rate.

(D) Equilibrium price is always equal to minimum average cost of the firms.

Choose the correct answer from the options given below:

Solution

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