Monopoly and Market Structures Quiz

A single seller dominates the market, facing many buyers.

A monopoly is characterized by the presence of a single seller.

Firms in monopolistic competition have some control over price due to product differentiation.

Perfect information is not a barrier to entry in a monopoly; it implies complete knowledge and transparency in the market.

A natural monopoly occurs when a single firm can produce at a lower cost than having multiple firms in the same industry.

Monopolistic competition involves high product differentiation among firms.

Oligopoly firms may engage in collusive agreements, coordinating their actions to influence the market.

Oligopoly involves a small number of interdependent firms influencing each other's decisions.

Firms in monopolistic competition face a downward-sloping demand curve due to product differentiation.

With only one seller in a monopoly, the possibility of price discrimination increases as the seller has more control over pricing.

Monopoly has the highest barriers to entry, limiting new firms from entering the market.

Duopoly consists of two sellers dominating the market with many buyers.

Cartels, a form of collusion, are often observed in oligopoly markets with a small number of firms.

Monopoly is more likely to result in allocative inefficiency, as the single seller may not allocate resources optimally.

Monopoly is characterized by the presence of economies of scale, leading to lower average costs as the scale of production increases.