#1
Which market structure is characterized by a large number of firms, homogeneous products, and easy entry and exit?
Perfect competition
ExplanationMany firms selling identical products with easy market entry.
#2
What is a key characteristic of a monopoly market structure?
A single firm selling a unique product
ExplanationOne seller with exclusive control over a product.
#3
Which market structure is characterized by a small number of interdependent firms?
Oligopoly
ExplanationFew large firms influence market outcomes.
#4
What is a characteristic of a perfectly competitive market?
Many buyers and sellers
ExplanationNumerous buyers and sellers with no market power.
#5
Which market structure is characterized by a few large firms dominating the market?
Oligopoly
ExplanationMarket controlled by a handful of influential firms.
#6
In a perfectly competitive market, what is the shape of the demand curve facing an individual firm?
Horizontal
ExplanationDemand curve is flat due to perfect substitutability.
#7
Which of the following is a characteristic of monopolistic competition?
Price-setting power
ExplanationFirms can set prices due to product differentiation.
#8
Which market structure is most likely to produce allocative inefficiency?
Monopoly
ExplanationDue to lack of competition, resources are misallocated.
#9
In monopolistic competition, what happens to economic profit in the long run?
Economic profit decreases to zero
ExplanationFirms enter the market, eroding profits.
#10
In monopolistic competition, firms have some degree of control over which aspect of their product?
Price
ExplanationThey can set prices due to product differentiation.
#11
In an oligopoly market structure, firms tend to engage in which of the following behaviors?
Collusion
ExplanationFirms cooperate to control prices and outputs.
#12
Which market structure typically leads to the highest level of economic profit in the long run?
Monopoly
ExplanationSingle seller dominates, leading to higher profits.
#13
What is a characteristic feature of a contestable market?
Potential threat of entry and exit
ExplanationPossibility of new firms entering and exiting.
#14
In which market structure is product differentiation most prominent?
Monopolistic competition
ExplanationFirms differentiate products to gain market share.
#15
In which market structure do firms engage in strategic decision-making due to mutual interdependence?
Oligopoly
ExplanationFirms consider rivals' actions when making decisions.