#1
Which market structure is characterized by many small firms selling identical products?
Perfect competition
ExplanationMany small firms sell identical products.
#2
What is a key feature of a monopolistic competition market structure?
Few sellers with differentiated products
ExplanationFew sellers offer differentiated products.
#3
Which market structure typically exhibits the highest level of economic efficiency?
Perfect competition
ExplanationPerfect competition exhibits the highest economic efficiency.
#4
In which market structure does a single firm dominate the entire market?
Monopoly
ExplanationA single firm dominates the entire market.
#5
Which market structure is characterized by interdependent decision-making among firms?
Oligopoly
ExplanationFirms make decisions interdependently.
#6
Which market structure often leads to the highest level of product differentiation?
Monopolistic competition
ExplanationMonopolistic competition leads to high product differentiation.
#7
What is a characteristic of a monopolistic competition market structure regarding entry and exit?
Low barriers to entry and exit
ExplanationMonopolistic competition has low entry and exit barriers.
#8
What is a characteristic of a monopolistic competition market structure regarding price-setting power?
Firms have moderate price-setting power
ExplanationFirms in monopolistic competition have moderate price-setting power.
#9
Which market structure is most likely to result in excess capacity in the long run?
Monopolistic competition
ExplanationMonopolistic competition leads to excess capacity in the long run.
#10
Which of the following is a characteristic of an oligopoly?
Few large firms
ExplanationOligopoly is characterized by few large firms.
#11
In a perfectly competitive market, what is the condition for long-run equilibrium?
Average total cost equals price
ExplanationLong-run equilibrium is reached when average total cost equals price.
#12
Which market structure typically leads to the highest level of allocative efficiency?
Perfect competition
ExplanationPerfect competition leads to the highest allocative efficiency.
#13
What is the relationship between market power and market structure?
Market power is directly related to market structure
ExplanationMarket power directly correlates with market structure.
#14
Which market structure is most likely to result in allocative inefficiency?
Monopoly
ExplanationMonopoly is most likely to result in allocative inefficiency.
#15
Which market structure typically leads to the highest level of innovation?
Oligopoly
ExplanationOligopoly typically leads to the highest level of innovation.
#16
Which market structure is most likely to exhibit collusion among firms?
Oligopoly
ExplanationOligopoly is most likely to exhibit collusion among firms.