#1
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and sellers
ExplanationPerfect competition features numerous buyers and sellers.
#2
In which market structure do firms have the least control over prices?
Perfect competition
ExplanationPerfect competition implies minimal firm control over prices.
#3
Which market structure is characterized by a single seller with complete control over the market?
Monopoly
ExplanationMonopolies involve a lone seller with full market control.
#4
What is a characteristic of an oligopoly?
Interdependence among firms
ExplanationOligopolies exhibit interdependence among competing firms.
#5
Which market structure often results in non-price competition?
Monopolistic competition
ExplanationMonopolistic competition frequently involves non-price competition.
#6
What is a characteristic of monopolistic competition?
Firms engage in product differentiation
ExplanationMonopolistic competition involves firms differentiating their products.
#7
Which market structure is characterized by a few large firms dominating the market?
Oligopoly
ExplanationOligopoly entails dominance by a handful of large firms.
#8
Which market structure typically leads to the highest level of efficiency?
Perfect competition
ExplanationPerfect competition often leads to the highest efficiency.
#9
What is a characteristic of a natural monopoly?
High barriers to entry
ExplanationNatural monopolies are characterized by significant barriers to entry.
#10
Which market structure is characterized by free entry and exit of firms?
Perfect competition
ExplanationPerfect competition allows for free entry and exit.
#11
What is a common feature of monopolies?
Price-setting ability
ExplanationMonopolies commonly possess the power to set prices.
#12
Which of the following market structures is most likely to lead to allocative inefficiency?
Monopoly
ExplanationMonopolies are prone to allocative inefficiency.
#13
What is a common characteristic of a cartel?
Cooperation among firms
ExplanationCartels typically involve cooperation among member firms.
#14
What is a characteristic of a duopoly?
Existence of only two sellers
ExplanationDuopolies involve only two sellers in the market.
#15
Which market structure is likely to have the least allocative inefficiency?
Perfect competition
ExplanationPerfect competition is likely to have the least allocative inefficiency.