Q.1 Which of the following laws primarily regulates trade practices and protects consumers in India?
The Companies Act, 2013
The Competition Act, 2002
The Contract Act, 1872
The Income Tax Act, 1961
Explanation - The Competition Act, 2002 regulates anti-competitive practices, promotes fair trade, and protects consumer interests.
Correct answer is: The Competition Act, 2002
Q.2 The Monopolies and Restrictive Trade Practices Act (MRTP) was replaced by which act in India?
Competition Act, 2002
Consumer Protection Act, 2019
Companies Act, 2013
Trade Marks Act, 1999
Explanation - The MRTP Act was repealed and replaced by the Competition Act, 2002, which provides a more modern framework for controlling anti-competitive practices.
Correct answer is: Competition Act, 2002
Q.3 Which of the following is an example of unfair trade practice?
Advertising genuine features
Selling products at competitive prices
False claims about a product
Providing warranty as promised
Explanation - False claims mislead consumers and are considered unfair trade practices under consumer protection and trade laws.
Correct answer is: False claims about a product
Q.4 Which body in India is primarily responsible for preventing anti-competitive business practices?
Securities and Exchange Board of India (SEBI)
Competition Commission of India (CCI)
Reserve Bank of India (RBI)
Ministry of Commerce
Explanation - The CCI enforces the Competition Act, 2002 to prevent anti-competitive practices and promote market competition.
Correct answer is: Competition Commission of India (CCI)
Q.5 Which of the following agreements is generally prohibited under trade regulation laws?
Joint venture for research
Price-fixing agreements
Collaborative marketing
Franchising agreements
Explanation - Price-fixing among competitors restricts competition and is prohibited under trade regulation and competition laws.
Correct answer is: Price-fixing agreements
Q.6 The term 'cartel' in trade regulation refers to:
A group of companies collaborating to fix prices
A new marketing strategy
A government trade policy
A trade union body
Explanation - A cartel is formed when businesses collude to manipulate prices, restrict supply, or divide markets, which is illegal under competition laws.
Correct answer is: A group of companies collaborating to fix prices
Q.7 Which section of the Competition Act, 2002 deals with abuse of dominant position?
Section 3
Section 4
Section 5
Section 6
Explanation - Section 4 of the Competition Act, 2002 addresses abuse of dominant position by enterprises to ensure fair competition.
Correct answer is: Section 4
Q.8 Which of the following is NOT a function of the Competition Commission of India?
Eliminating anti-competitive practices
Promoting competition
Approving mergers with public interest
Collecting direct taxes
Explanation - CCI does not collect taxes; its primary role is to regulate and promote competition and prevent anti-competitive practices.
Correct answer is: Collecting direct taxes
Q.9 Which type of agreement is generally allowed under competition law?
Bid rigging
Market sharing
Exclusive distribution with reasonable conditions
Price-fixing
Explanation - Exclusive distribution agreements are allowed if they do not result in anti-competitive practices and maintain fair trade.
Correct answer is: Exclusive distribution with reasonable conditions
Q.10 Under trade regulation laws, 'predatory pricing' means:
Selling goods at high prices
Selling goods below cost to eliminate competition
Selling luxury goods only
Fixing maximum retail prices legally
Explanation - Predatory pricing is an anti-competitive practice where goods are sold at very low prices to push competitors out of the market.
Correct answer is: Selling goods below cost to eliminate competition
Q.11 Which of the following is a consumer right protected under trade regulation?
Right to free education
Right to choose freely
Right to vote
Right to own property
Explanation - Consumers are entitled to choose goods and services freely without being misled or restricted, as per consumer protection laws.
Correct answer is: Right to choose freely
Q.12 Which of the following is considered a restrictive trade practice?
Advertising products accurately
Selling surplus stock at a discount
Entering into agreements to control supply
Offering after-sales service
Explanation - Agreements to control supply reduce competition and are considered restrictive trade practices under competition laws.
Correct answer is: Entering into agreements to control supply
Q.13 Which law governs unfair trade practices related to advertising in India?
The Consumer Protection Act, 2019
The Trade Marks Act, 1999
The Companies Act, 2013
The Negotiable Instruments Act, 1881
Explanation - The Consumer Protection Act addresses unfair trade practices, including misleading advertisements.
Correct answer is: The Consumer Protection Act, 2019
Q.14 An enterprise having more than what percentage of market share is considered dominant under the Competition Act?
10%
25%
50%
75%
Explanation - An enterprise with more than 50% market share is presumed to have a dominant position and must not abuse it.
Correct answer is: 50%
Q.15 Which of the following practices may attract penalties under the Competition Act?
Competing fairly
Bid rigging
Providing quality service
Innovation in product design
Explanation - Bid rigging is an anti-competitive practice and is punishable under the Competition Act, 2002.
Correct answer is: Bid rigging
Q.16 Which body has the power to approve or disapprove mergers in India?
Ministry of Finance
Competition Commission of India
Reserve Bank of India
SEBI
Explanation - CCI reviews mergers and acquisitions to ensure they do not harm market competition.
Correct answer is: Competition Commission of India
Q.17 Under the Competition Act, 2002, enterprises cannot enter into agreements that:
Promote technological collaboration
Fix prices or restrict output
Improve distribution
Conduct market research together
Explanation - Agreements that fix prices or restrict supply are anti-competitive and prohibited under the Act.
Correct answer is: Fix prices or restrict output
Q.18 Which of the following is an example of vertical restraint in trade?
Price fixing between competitors
Exclusive dealership agreement
Collusion among manufacturers
Market division among competitors
Explanation - Vertical restraints occur between different levels of production or distribution, like exclusive dealership agreements.
Correct answer is: Exclusive dealership agreement
Q.19 Which section of the Competition Act deals with regulation of combinations (mergers and acquisitions)?
Section 3
Section 5
Section 6
Section 8
Explanation - Section 5 of the Competition Act regulates combinations (mergers and acquisitions) to prevent adverse effects on competition.
Correct answer is: Section 5
Q.20 Which of the following is an objective of trade regulation laws?
Promoting monopolies
Protecting competition
Restricting consumer choice
Discouraging innovation
Explanation - Trade regulation laws aim to protect competition, ensure fairness, and prevent anti-competitive practices.
Correct answer is: Protecting competition
Q.21 Which of the following constitutes an abuse of dominant position?
Offering discounts to all customers
Preventing new competitors from entering the market
Increasing efficiency in production
Improving customer service
Explanation - Abuse of dominant position includes practices that unfairly prevent competition or exploit consumers.
Correct answer is: Preventing new competitors from entering the market
Q.22 The main aim of regulating trade practices is to:
Increase government revenue
Promote fair competition
Support monopolies
Control labor unions
Explanation - Regulating trade practices ensures fair competition, prevents exploitation, and protects consumer rights.
Correct answer is: Promote fair competition
Q.23 Which of the following is a legal consequence of violating the Competition Act, 2002?
Imprisonment and fines
Mandatory advertising
Awarding government contracts
Promotion of executives
Explanation - Violating the Competition Act can lead to fines, penalties, or imprisonment depending on the severity of the anti-competitive practice.
Correct answer is: Imprisonment and fines
Q.24 In trade regulation, 'market sharing' agreements are:
Allowed if approved by CCI
Prohibited as anti-competitive
Mandatory for all enterprises
Encouraged for small businesses
Explanation - Market sharing between competitors restricts competition and is prohibited under trade and competition laws.
Correct answer is: Prohibited as anti-competitive