Monopoly and Market Power Quiz
Test your knowledge on monopoly, market power, barriers to entry, antitrust laws, and more in industrial organization with this quiz!
#1
What is monopoly?
A market structure with many sellers and many buyers
A market structure with one seller and many buyers
A market structure with one seller and one buyer
A market structure with few sellers and few buyers
#2
Which of the following is a characteristic of a monopoly?
Price taker
Price maker
Perfect competition
Many sellers
#3
What is market power?
The ability of a firm to influence market price by its own actions
The ability of a firm to follow market trends
The ability of a firm to maximize profits
The ability of a firm to produce goods efficiently
#4
Which of the following is a barrier to entry in a monopoly?
Low start-up costs
High competition
Patents and copyrights
Many substitute goods
#5
What is a natural monopoly?
A monopoly that arises from government regulations
A monopoly that occurs due to economies of scale
A monopoly that is controlled by a single firm
A monopoly that is formed through mergers
#6
Which of the following is NOT a type of monopoly?
Pure monopoly
Natural monopoly
Regulated monopoly
Perfect competition
#7
What is a price discrimination strategy used by monopolies?
Setting a single price for all customers
Charging different prices based on the buyer's willingness to pay
Offering discounts to all customers
Matching competitor's prices
#8
What is a monopoly's demand curve like?
Perfectly elastic
Perfectly inelastic
Downward-sloping
Horizontal
#9
What is the primary goal of a monopolist?
To produce at the lowest possible cost
To maximize market competition
To maximize profit
To achieve perfect competition
#10
What is an example of a real-life monopoly?
The smartphone market
The fast-food industry
The diamond industry
The clothing industry
#11
How do antitrust laws aim to address monopolies?
By promoting mergers and acquisitions
By preventing unfair business practices and promoting competition
By allowing monopolies to operate freely
By imposing price controls on monopolies
#12
Which of the following is a consequence of monopolies?
Higher prices and reduced output
Lower prices and increased output
Increased competition
Equal distribution of resources
#13
What is a monopoly rent?
Extra money charged by monopolies for no reason
The difference between the price charged and the marginal cost
Payment made to the government by monopolies
A government subsidy to monopolies
#14
What is a potential disadvantage of monopolies for consumers?
Increased innovation
Lower prices
Reduced choice
Higher competition
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