#1
Which market structure features a single seller producing a unique product with no close substitutes?
Monopoly
ExplanationMonopoly: Single seller, unique product, no substitutes.
#2
In perfect competition, the demand curve faced by an individual firm is:
Perfectly elastic
ExplanationPerfect competition: Firm faces perfectly elastic demand curve.
#3
What is a characteristic of monopolistic competition?
Product differentiation
ExplanationMonopolistic competition: Product differentiation.
#4
In the context of market structures, 'price taker' refers to firms in:
Perfect competition
ExplanationPerfect competition: Firms are price takers.
#5
Which market structure best represents a scenario with many sellers, each selling slightly differentiated products, but not enough to eliminate competition?
Monopolistic competition
ExplanationMonopolistic competition: Many sellers, slightly differentiated products.
#6
In which market structure do firms have the most pricing power?
Monopoly
ExplanationMonopoly: Firms have maximum pricing power.
#7
Price discrimination is more feasible in markets with:
A single seller and no close substitutes for the product
ExplanationMonopoly: Price discrimination feasible with single seller, no substitutes.
#8
In an oligopoly market, a key feature is:
A few sellers and strategic interdependence
ExplanationOligopoly: Few sellers, strategic interdependence.
#9
Marginal cost pricing is more likely to be observed in which market structure?
Perfect competition
ExplanationPerfect competition: Marginal cost pricing is observed.
#10
In which market structure are strategic interactions between firms most significant?
Oligopoly
ExplanationOligopoly: Significant strategic interactions between firms.
#11
Bertrand competition is characterized by firms competing on:
Price
ExplanationBertrand competition: Firms compete on price.
#12
What does the term 'contestable market' imply?
Barriers to entry and exit are low, allowing for potential competition
ExplanationContestable market: Low barriers to entry/exit, potential competition.
#13
Which market structure is most likely to lead to product innovation and diverse choices for consumers?
Monopolistic competition
ExplanationMonopolistic competition: Leads to product innovation, diverse choices.
#14
What does the Herfindahl-Hirschman Index (HHI) measure?
The concentration of firms in a market
ExplanationHerfindahl-Hirschman Index (HHI): Measures market concentration.
#15
What does 'natural monopoly' refer to?
A monopoly that arises due to high fixed costs and significant economies of scale
ExplanationNatural monopoly: Arises from high fixed costs, economies of scale.