Lesson 4.2.1

4.2.1 Monopoly equilibrium, efficiency and dynamic efficiency Quiz: OCR Economics, Unit 4

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

In partnership with Revision Ninja

Lesson 4.2.1, Monopoly equilibrium, efficiency and dynamic efficiency: 20 multiple choice questions for the OCR Economics (H460), Unit 4: Market structures, written with Revision Ninja.

Host it live on the board and students join with a game code on their own devices, or revise alone with Free Play. The answers are revealed in the game.

Host this setFree Play

The 20 questions

  1. Which condition determines the profit-maximising output level for a monopoly firm?

    • MR = 0
    • P = AC
    • AR = AC
    • MR = MC

  2. What type of profit can a monopolist earn in the long run due to high entry barriers?

    • Supernormal profit
    • Subnormal profit
    • Normal profit
    • Accounting loss

  3. How does a monopoly's demand curve compare to its marginal revenue curve at any positive output?

    • They are identical
    • They are parallel
    • Demand is higher
    • Demand is lower

  4. Which condition must be met for a monopoly to achieve allocative efficiency?

    • MC = AC
    • P = AC
    • P = MC
    • MR = 0

  5. Why is a profit-maximising monopolist considered allocatively inefficient?

    • MR exceeds price
    • Price equals MC
    • Price exceeds MC
    • Price below MC

  6. At what point on the average cost curve is productive efficiency achieved?

    • Minimum AC point
    • Maximum AC point
    • Profit-maximising point
    • Shutdown point

  7. Which type of efficiency involves long-run improvements in technology, products and production processes?

    • Dynamic efficiency
    • Static efficiency
    • Productive efficiency
    • Allocative efficiency

  8. What enables a monopolist to potentially achieve dynamic efficiency compared to a competitive firm?

    • Perfect information
    • Supernormal profits
    • Low entry barriers
    • Homogeneous products

  9. What economic term describes the loss of economic welfare caused by monopoly pricing power?

    • Normal profit
    • Consumer surplus
    • Producer surplus
    • Deadweight loss

  10. Compared to a competitive market, what are monopoly price and output levels?

    • Higher price, higher output
    • Lower price, lower output
    • Higher price, lower output
    • Lower price, higher output

  11. What rule identifies the output level that maximises total revenue for a single-price monopolist?

    • AR = AC
    • P = MC
    • MR = 0
    • MC = 0

  12. What form of inefficiency occurs when a monopoly lacks competitive pressure to control costs?

    • Allocative inefficiency
    • Dynamic inefficiency
    • Productive efficiency
    • X-inefficiency

  13. If a firm charges £12 per unit and marginal cost is £8, what is the allocative status?

    • Allocatively inefficient
    • Dynamically efficient
    • Productively efficient
    • Allocatively efficient

  14. What is the price elasticity of demand along the section of demand where marginal revenue is positive?

    • Elastic
    • Unit elastic
    • Inelastic
    • Perfectly inelastic

  15. What happens to consumer surplus when a competitive industry becomes a monopoly?

    • It increases
    • It decreases
    • It becomes zero
    • It remains unchanged

  16. Which structural condition characterizes a natural monopoly across all relevant levels of market demand?

    • Constant average costs
    • Falling average costs
    • Rising average costs
    • Zero fixed costs

  17. If a natural monopoly is forced to set price equal to marginal cost, what financial outcome results?

    • Making supernormal profit
    • Making a loss
    • Maximising revenue
    • Breaking even

  18. What is the cross elasticity of demand between a pure monopoly's product and other goods?

    • Negative infinity
    • Near zero
    • Unit elastic
    • Infinitely high

  19. In a monopoly diagram, what does the area between price and the demand curve represent?

    • Deadweight loss
    • Producer surplus
    • Consumer surplus
    • Total cost

  20. What condition allows a monopoly to practice third-degree price discrimination between two consumer groups?

    • Equal marginal costs
    • Uniform demand curves
    • Identical consumer incomes
    • Differing PED values

All OCR Economics quizzes