MARKET STRUCTURES Flashcards
What is market structure?
Market structure refers to the characteristics and organization of a market, including the number of firms, type of products, and the nature of competition.
Name the four main types of market structures.
The four main types of market structures are perfect competition, monopolistic competition, oligopoly, and monopoly.
True or False: In a perfect competition, all firms sell identical products.
True
Fill in the blank: A market with only one seller is called a _______.
monopoly
What type of market structure is characterized by many firms selling similar but not identical products?
Monopolistic competition
Which market structure has the highest barriers to entry?
Monopoly
Multiple Choice: In which market structure do firms have some control over pricing? A) Perfect Competition B) Monopoly C) Oligopoly D) All of the above
C) Oligopoly
True or False: In monopolistic competition, firms can freely enter and exit the market.
True
What is a characteristic of oligopoly?
A characteristic of oligopoly is that a few large firms dominate the market.
Fill in the blank: In a monopoly, the single seller is a price _______.
maker
What is one advantage of perfect competition for consumers?
Prices tend to be lower and reflect the true cost of production.
Multiple Choice: Which type of market structure is characterized by non-price competition? A) Perfect Competition B) Oligopoly C) Monopoly D) All of the above
B) Oligopoly
What is the primary goal of firms in a monopoly?
To maximize profits by controlling prices and output.
True or False: In perfect competition, firms are price takers.
True
What is the primary characteristic of monopolistic competition?
Firms sell differentiated products.
Fill in the blank: The demand curve for a firm in perfect competition is _______.
perfectly elastic
Multiple Choice: Which of the following is NOT a characteristic of a monopoly? A) Single seller B) Price discrimination C) Perfect information D) High barriers to entry
C) Perfect information
What effect does an oligopoly have on market price?
Oligopolies can lead to price rigidity and collusion among firms.
True or False: Barriers to entry are low in monopolistic competition.
True
What is one way firms in an oligopoly may compete?
Firms may compete through advertising and product differentiation.
Fill in the blank: A market structure where firms can easily enter and exit is known as _______.
perfect competition
What is a common outcome of monopolistic competition?
Firms earn normal profits in the long run.
Multiple Choice: Which market structure is most likely to have price wars? A) Perfect Competition B) Monopoly C) Oligopoly D) Monopolistic Competition
C) Oligopoly
What is one disadvantage of monopoly for consumers?
Higher prices due to lack of competition.
True or False: In a monopolistically competitive market, firms can influence the market price.
True
