G202 EXAM 2 COMPREHENSIVE EXAM SCRIPT
2026 QUESTIONS AND ANSWERS
GUARANTEED TO PASS
◉ How do firms in perfect competition behave in terms of market
power? Answer: Firms have 0 market power and are price takers.
◉ What is the output strategy for firms in perfect competition?
Answer: Firms focus on operational efficiency to reduce marginal
costs.
◉ What characterizes firms in imperfect competition? Answer:
Firms sell differentiated products, have market power, and are price
makers.
◉ What is the profit maximization condition for firms in imperfect
competition? Answer: Firms maximize profit where MR = MC
(Marginal Revenue equals Marginal Cost).
◉ What is the relationship between price and marginal cost in
imperfect competition? Answer: P > MC (Price is greater than
Marginal Cost).
,◉ What is social welfare maximization? Answer: Social welfare is
maximized when P = MC, leading to the largest total surplus.
◉ What happens to social welfare under imperfect competition?
Answer: Firms produce too little and charge too high a price, leading
to social welfare loss.
◉ How is marginal cost calculated? Answer: Marginal Cost = Total
Cost of Q2 - Total Cost of Q1.
◉ What is perfect price discrimination? Answer: A firm charges each
consumer their exact willingness to pay, capturing all consumer
surplus.
◉ What is the outcome of perfect price discrimination on social
welfare? Answer: It is socially efficient since output occurs where
MB = MC.
◉ What is imperfect price discrimination? Answer: Firms charge
different prices to groups based on willingness to pay, capturing
some consumer surplus.
◉ What is the impact of imperfect price discrimination on social
welfare? Answer: It is socially inefficient since output stops where
MR = MC, not MB = MC.
, ◉ What is the main strategy for firms in perfect competition to
increase profit? Answer: Reduce costs through cheaper production
and more efficient processes.
◉ What is the main strategy for firms in imperfect competition to
increase profit? Answer: Differentiate products and win consumers
through marketing and branding.
◉ How does Unilever differentiate its products in the market?
Answer: Through sustainability initiatives and purpose-driven
marketing.
◉ What is the significance of Unilever's Sustainable Living Plan?
Answer: It helps Unilever raise prices, increase market share, and
strengthen brand loyalty.
◉ What types of products does Unilever sell? Answer: Food,
personal care, and home products.
◉ How does Unilever influence consumer behavior? Answer: By
shaping supply chains and pushing sustainability initiatives
worldwide.
2026 QUESTIONS AND ANSWERS
GUARANTEED TO PASS
◉ How do firms in perfect competition behave in terms of market
power? Answer: Firms have 0 market power and are price takers.
◉ What is the output strategy for firms in perfect competition?
Answer: Firms focus on operational efficiency to reduce marginal
costs.
◉ What characterizes firms in imperfect competition? Answer:
Firms sell differentiated products, have market power, and are price
makers.
◉ What is the profit maximization condition for firms in imperfect
competition? Answer: Firms maximize profit where MR = MC
(Marginal Revenue equals Marginal Cost).
◉ What is the relationship between price and marginal cost in
imperfect competition? Answer: P > MC (Price is greater than
Marginal Cost).
,◉ What is social welfare maximization? Answer: Social welfare is
maximized when P = MC, leading to the largest total surplus.
◉ What happens to social welfare under imperfect competition?
Answer: Firms produce too little and charge too high a price, leading
to social welfare loss.
◉ How is marginal cost calculated? Answer: Marginal Cost = Total
Cost of Q2 - Total Cost of Q1.
◉ What is perfect price discrimination? Answer: A firm charges each
consumer their exact willingness to pay, capturing all consumer
surplus.
◉ What is the outcome of perfect price discrimination on social
welfare? Answer: It is socially efficient since output occurs where
MB = MC.
◉ What is imperfect price discrimination? Answer: Firms charge
different prices to groups based on willingness to pay, capturing
some consumer surplus.
◉ What is the impact of imperfect price discrimination on social
welfare? Answer: It is socially inefficient since output stops where
MR = MC, not MB = MC.
, ◉ What is the main strategy for firms in perfect competition to
increase profit? Answer: Reduce costs through cheaper production
and more efficient processes.
◉ What is the main strategy for firms in imperfect competition to
increase profit? Answer: Differentiate products and win consumers
through marketing and branding.
◉ How does Unilever differentiate its products in the market?
Answer: Through sustainability initiatives and purpose-driven
marketing.
◉ What is the significance of Unilever's Sustainable Living Plan?
Answer: It helps Unilever raise prices, increase market share, and
strengthen brand loyalty.
◉ What types of products does Unilever sell? Answer: Food,
personal care, and home products.
◉ How does Unilever influence consumer behavior? Answer: By
shaping supply chains and pushing sustainability initiatives
worldwide.
