Market Competition and Firm Behavior Quiz

Perfect competition is characterized by a large number of buyers and sellers.

Monopolistic competition involves many sellers offering differentiated products.

Perfect competition is characterized by firms being price takers, accepting the market price.

Perfectly competitive markets have no barriers to entry, allowing free competition.

A fast-food restaurant chain is an example of monopolistic competition with differentiated products.

A monopoly is characterized by a single seller with complete control over the market.

Monopoly usually has the highest barriers to entry, limiting competition.

Oligopoly is characterized by mutual interdependence among competing firms.

Monopolistic competition involves mutual interdependence among competing firms.

Firms in a monopoly face a downward-sloping demand curve, as they are the sole providers.

Oligopoly is characterized by mutual interdependence among competing firms.

Monopolistic competition involves mutual interdependence among competing firms.

Government regulation can act as a barrier to entry for new businesses.

Monopoly tends to result in the highest economic profits for firms in the long run due to limited competition.

The Herfindahl-Hirschman Index measures market concentration, indicating the degree of competition.

Perfect competition tends to result in the highest level of consumer surplus due to competitive pricing.

Monopolistic competition typically results in excess capacity due to product differentiation.

Perfect competition typically results in the lowest level of economic profits due to intense competition.