MARKET STRUCTURES

Question 1

What is market structure?

Answer 1

Market structure refers to the characteristics and organization of a market, including the number of firms, type of products, and the nature of competition.

Question 2

Name the four main types of market structures.

Answer 2

The four main types of market structures are perfect competition, monopolistic competition, oligopoly, and monopoly.

Question 3

True or False: In a perfect competition, all firms sell identical products.

Answer 3

True

Question 4

Fill in the blank: A market with only one seller is called a _______.

Answer 4

monopoly

Question 5

What type of market structure is characterized by many firms selling similar but not identical products?

Answer 5

Monopolistic competition

Question 6

Which market structure has the highest barriers to entry?

Answer 6

Monopoly

Question 7

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

Answer 7

C) Oligopoly

Question 8

True or False: In monopolistic competition, firms can freely enter and exit the market.

Answer 8

True

Question 9

What is a characteristic of oligopoly?

Answer 9

A characteristic of oligopoly is that a few large firms dominate the market.

Question 10

Fill in the blank: In a monopoly, the single seller is a price _______.

Answer 10

maker

Question 11

What is one advantage of perfect competition for consumers?

Answer 11

Prices tend to be lower and reflect the true cost of production.

Question 12

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

Answer 12

B) Oligopoly

Question 13

What is the primary goal of firms in a monopoly?

Answer 13

To maximize profits by controlling prices and output.

Question 14

True or False: In perfect competition, firms are price takers.

Answer 14

True

Question 15

What is the primary characteristic of monopolistic competition?

Answer 15

Firms sell differentiated products.

Question 16

Fill in the blank: The demand curve for a firm in perfect competition is _______.

Answer 16

perfectly elastic

Question 17

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

Answer 17

C) Perfect information

Question 18

What effect does an oligopoly have on market price?

Answer 18

Oligopolies can lead to price rigidity and collusion among firms.

Question 19

True or False: Barriers to entry are low in monopolistic competition.

Answer 19

True

Question 20

What is one way firms in an oligopoly may compete?

Answer 20

Firms may compete through advertising and product differentiation.

Question 21

Fill in the blank: A market structure where firms can easily enter and exit is known as _______.

Answer 21

perfect competition

Question 22

What is a common outcome of monopolistic competition?

Answer 22

Firms earn normal profits in the long run.

Question 23

Multiple Choice: Which market structure is most likely to have price wars? A) Perfect Competition B) Monopoly C) Oligopoly D) Monopolistic Competition

Answer 23

C) Oligopoly

Question 24

What is one disadvantage of monopoly for consumers?

Answer 24

Higher prices due to lack of competition.

Question 25

True or False: In a monopolistically competitive market, firms can influence the market price.

Answer 25

True