Market Structures and Efficiency Quiz

Perfect competition involves numerous small firms selling identical products with easy entry and exit.

Monopoly grants a single firm exclusive control, resulting in the highest degree of market power.

Monopoly is characterized by a single seller with no close substitutes.

Monopolistic competition is marked by product differentiation among competing firms.

A monopoly features a single seller with no close substitutes in the market.

Monopoly is characterized by high barriers to entry, limiting new competitors.

Oligopoly is marked by a handful of dominant firms influencing the market.

Monopolistic competition involves low entry barriers and product differentiation among firms.

Perfect competition generally leads to the most efficient resource allocation.

Monopolistic competition encourages innovation and product variety through differentiation.

Monopolistic competition often involves non-price competition through advertising and differentiation.

Perfect competition tends to maximize consumer surplus due to competitive pricing.

Perfect competition is characterized by numerous buyers and sellers with no individual market influence.

In a monopoly, the single seller (monopolist) has control over setting the market price.

Monopoly is prone to deadweight loss due to restricted output and higher prices.

Oligopoly is marked by significant barriers to entry, limiting new competitors.

Perfect competition is associated with allocative efficiency, optimizing resource distribution.

Oligopoly involves mutual interdependence among a few dominant firms in the market.