#1
What is a characteristic of perfect competition?
Price taker
ExplanationFirms accept market price as given.
#2
In a duopoly, how many firms dominate the market?
Two
ExplanationMarket controlled by only two firms.
#3
What is a characteristic of a monopoly?
Single seller
ExplanationOnly one seller controls the entire market.
#4
In which market structure does a single firm act as the price setter?
Monopoly
ExplanationThe sole firm dictates the market price.
#5
What is a characteristic of a duopoly?
Two sellers
ExplanationMarket dominated by two firms.
#6
Which market structure is characterized by a large number of firms, differentiated products, and low barriers to entry?
Monopolistic competition
ExplanationMany firms sell similar but not identical products with low barriers to entry.
#7
In monopolistic competition, what role does product differentiation play?
Products are unique
ExplanationEach firm offers slightly different products.
#8
In a monopolistic market, what is the impact of product differentiation on pricing?
Firms have control over pricing
ExplanationFirms can set prices to some extent due to product differentiation.
#9
What is a common feature of both oligopoly and monopolistic competition?
Many buyers and sellers
ExplanationBoth have a large number of buyers and sellers.
#10
Which market structure has the most control over the price of its product?
Monopoly
ExplanationThe sole firm sets the price.
#11
What is a potential outcome of collusion in an oligopolistic market?
Market dominance
ExplanationFirms working together can dominate the market.
#12
In monopolistic competition, what is the level of product substitutability among firms' products?
High substitutability
ExplanationProducts are similar, offering many substitutes.
#13
What is a key characteristic of a natural monopoly?
Economies of scale
ExplanationLarge-scale production lowers average costs, discouraging competition.
#14
In which market structure do firms engage in non-price competition, such as advertising and branding?
Monopolistic competition
ExplanationFirms compete through product differentiation and marketing.
#15
What is a characteristic of a collusive oligopoly?
Firms collude to fix prices
ExplanationFirms cooperate to control market prices.
#16
What is a key characteristic of an oligopoly?
Interdependence among firms
ExplanationFirms' decisions depend on the actions of their competitors.
#17
Which market structure has the least government intervention?
Perfect competition
ExplanationNo barriers to entry or exit, and no price regulation.
#18
Which market structure is likely to result in the highest level of advertising and marketing expenses?
Monopolistic competition
ExplanationDifferentiated products lead to heavy advertising.
#19
What is an example of a barrier to entry in an oligopolistic market?
High startup costs
ExplanationEntering the market requires significant initial investment.
#20
In which market structure is demand highly elastic?
Perfect competition
ExplanationConsumers have many substitutes, making demand highly responsive to price changes.
#21
What is a distinguishing feature of monopolistic competition?
Many sellers
ExplanationNumerous firms offering slightly differentiated products.
#22
Which market structure often leads to allocative inefficiency and a deadweight loss?
Monopoly
ExplanationThe firm doesn't produce at the point where marginal cost equals price.
#23
What is a characteristic of a contestable market?
Low barriers to entry
ExplanationNew firms can enter and exit the market freely.
#24
In which market structure is the demand curve facing the firm perfectly elastic?
Perfect competition
ExplanationFirm can sell any quantity at the market price.
#25
What is a key characteristic of a homogeneous product in an oligopolistic market?
Identical products
ExplanationProducts are indistinguishable from each other.