Market Structures

Question 1

Barrier to entry?

Answer 1

Obstacles that limit the ability of new firms to enter a particular industry

Question 2

Cartel

Answer 2

A group that works together to lower prices and limit supply

Question 3

Deregulation?

Answer 3

Actions taken to reduce or remove government oversight an control of businesses

Question 4

Market structure?

Answer 4

Economic model that allows economists to examine competition among businesses in the same industry

Question 5

Monopolistic competition (polyopolies)?

Answer 5

Have many sellers that offer similar but not standardized products

Question 6

Monopoly?

Answer 6

Occurs when there is only one seller of a product that has no close substitute

Question 7

Oligopoly?

Answer 7

Few sellers offer similar products

Question 8

Patent?

Answer 8

How a technological monopoly restricts the market, a device that blocks other businesses access to that technology

Question 9

Predatory pricing?

Answer 9

Businesses set prices low below cost for a time to drive competition out of the market

Question 10

Price fixing?

Answer 10

Businesses agree to set prices of competing products

Question 11

Product differentiation?

Answer 11

Allows price differences

Question 12

Public disclosure?

Answer 12

Policy that requires businesses to reveal product information

Question 13

Regulation?

Answer 13

Controlling business behaviors through a set of rules or laws

Question 14

Standardized product?

Answer 14

All products are essentially the same

Question 15

Trust?

Answer 15

A group of firms combined in order to reduce competition in an industry

Question 16

What are the characteristics of perfect competition?

Answer 16

The characteristics of perfect competition are; numerous buyers and sellers, standardized products, freedom to enter and exit the market, independent buyers and sellers, and well informed buyers and sellers

Question 17

What are the characteristics of a monopoly?

Answer 17

The characteristics of a monopoly are; there is only one seller, it has a restricted and regulated market, and control of prices

Question 18

What are the characteristics of monopolistic competition?

Answer 18

The characteristics of monopolistic competition are; many sellers an buyers, similar but differentiated products, limited control of prices, and freedom to enter and exit the market

Question 19

How are monopolists able to control prices?

Answer 19

Monopolists are able to control prices by controlling supply

Question 20

What are the examples of the barriers to entry?

Answer 20

The example of the barriers to entry are; legal barriers, control of vital resources, significant scale businesses are at cost disadvantages, and market advantages of existing firms

Question 21

What are some examples of standardized products?

Answer 21

Agricultural products like corn or eggs

Question 22

What are some examples of unfair business practices?

Answer 22

Predatory pricing, market allocation, price fixing

Question 23

What are the ways in which the government attempts to protect the consumer?

Answer 23

The government protects consumers with: public disclosures and protection agencies

Question 24

What is a natural monopoly? Give an example

Answer 24

Occurs when the costs of production are lowest with only one producer. Ex: the water company

Question 25

What is a government monopoly? Give an example

Answer 25

Exists when the government wither owns and runs the business or authorizes the one producer. Ex: postal service

Question 26

What is a technological monopoly? Give an example

Answer 26

Occurs when a firm controls a manufacturing method, invention, or type of technology. Ex: polaroid

Question 27

What is a geographic monopoly? Give an example

Answer 27

Exists when there are no other producers of each. Ex: professional sports