#1
Which of the following is a characteristic of a monopoly market?
Single seller
ExplanationOnly one seller controls the market.
#2
Which of the following is a characteristic of a monopolistic competition market?
Many substitutes
ExplanationProducts are differentiated with close substitutes.
#3
What is a key characteristic of a perfectly competitive market?
Many buyers and sellers
ExplanationNumerous buyers and sellers with identical products.
#4
What is the primary factor that differentiates monopolistic competition from perfect competition?
Product differentiation
ExplanationDistinctive products offered by firms.
#5
What is a characteristic of a duopoly market structure?
Two sellers
ExplanationMarket controlled by two firms.
#6
What is a barrier to entry in a monopoly market?
Government regulation
ExplanationGovernment restrictions limit new entrants.
#7
Which market structure allows a firm to have significant pricing power?
Monopoly
ExplanationA single firm controls pricing in the market.
#8
What is the main source of market power in an oligopoly?
Few large firms
ExplanationControl exerted by a small number of large firms.
#9
Which of the following is a common strategy for a monopolist to maximize profit?
Producing where marginal revenue equals marginal cost
ExplanationOptimal output level for maximum profit.
#10
In a monopoly, what is the elasticity of demand for the firm's product?
Perfectly inelastic
ExplanationQuantity demanded does not change with price.
#11
What is a potential drawback of a monopoly for consumers?
Lack of product variety
ExplanationLimited choice due to sole provider.
#12
In a monopoly, the demand curve faced by the firm is:
Downward-sloping
ExplanationAs quantity increases, price decreases.
#13
What is a natural monopoly?
A monopoly that arises due to economies of scale
ExplanationOne firm dominates due to cost advantages.
#14
In a monopoly, what is the relationship between marginal revenue and price?
Marginal revenue is less than price
ExplanationMarginal revenue decreases with output.
#15
What is a strategic behavior commonly observed in oligopoly markets?
Collusion
ExplanationFirms cooperate to manipulate market outcomes.
#16
What is a characteristic of a contestable market?
Low exit barriers
ExplanationEase of entry and exit for firms.
#17
Which market structure is characterized by a few interdependent firms?
Oligopoly
ExplanationSmall number of firms affect each other's decisions.