#1
Which of the following best defines a monopoly?
A market with one seller and many buyers.
ExplanationA single seller dominates the market.
#2
What is a characteristic of a perfectly competitive market?
Many buyers and many sellers.
ExplanationNumerous buyers and sellers with homogeneous products.
#3
In a perfectly competitive market, firms are:
Price takers.
ExplanationThey accept the market price as given and cannot influence it.
#4
What is price discrimination in the context of monopoly?
Charging different prices to different customers based on their willingness to pay.
ExplanationAdjusting prices to extract maximum profit from different customer groups.
#5
Which of the following is a characteristic of a natural monopoly?
Economies of scale.
ExplanationLower average costs as output increases.
#6
What is a characteristic feature of a monopoly market?
Barriers to entry.
ExplanationObstacles preventing new competitors from entering the market.
#7
In a monopoly, the demand curve is:
Downward sloping.
ExplanationAs price decreases, quantity demanded increases.
#8
What is a characteristic of monopolistic competition?
Many sellers and many buyers.
ExplanationNumerous sellers with differentiated products.
#9
What is product differentiation in monopolistic competition?
When firms differentiate their products from competitors.
ExplanationMaking products distinct to attract consumers.
#10
What is the purpose of antitrust laws in relation to monopolies?
To regulate monopolies and promote competition.
ExplanationPreventing monopolistic practices and fostering market competition.
#11
Which of the following is a strategy a monopolist might use to maintain market power?
Predatory pricing.
ExplanationSetting low prices to drive competitors out of the market.
#12
What is a natural monopoly?
A monopoly that arises due to economies of scale.
ExplanationOccurs when a single firm can produce at lower costs than multiple firms.
#13
What is an example of an oligopoly market structure?
Fast food industry.
ExplanationFew large firms dominating the market.
#14
What is an example of a government-created monopoly?
A local water utility.
ExplanationExclusive rights granted by the government.
#15
What is a monopolistic practice aimed at driving competitors out of the market?
Predatory pricing.
ExplanationSetting low prices to eliminate competition.