#1
Which of the following is a characteristic of an oligopoly?
A few firms dominating the market
ExplanationLimited number of dominant firms.
#2
What is the primary characteristic of a monopolistic competition market structure?
Numerous small firms with differentiated products
ExplanationAbundance of small firms selling diverse products.
#3
Which of the following statements best describes a monopoly?
A market with a single firm dominating the industry
ExplanationIndustry domination by a single entity.
#4
What is a characteristic feature of a perfectly competitive market?
Numerous buyers and sellers
ExplanationAbundance of buyers and sellers.
#5
What is a key characteristic of a cartel?
Colluding to control market prices
ExplanationJoint effort to manipulate prices.
#6
What is a common strategy used by firms in an oligopoly to maintain their market power?
Collusion
ExplanationAgreeing to control prices together.
#7
In an oligopoly, if one firm reduces its prices, what might other firms do?
Collaborate to fix prices
ExplanationWorking together to stabilize prices.
#8
Which of the following is a feature of monopolistic competition?
Product differentiation
ExplanationDistinguishing products to attract customers.
#9
What is one advantage that monopolistic competition offers consumers?
Higher product quality
ExplanationEnhanced product standards for consumers.
#10
What is a common barrier to entry for a monopoly?
Economies of scale
ExplanationCost advantages with increased production.
#11
How does a natural monopoly differ from other types of monopolies?
It occurs when production costs decrease with scale
ExplanationCost efficiency with scale expansion.
#12
What is a kinked demand curve model used to explain in an oligopoly?
Price stability despite cost changes
ExplanationPredicting stable prices despite cost fluctuations.
#13
Which of the following is NOT a barrier to entry in an oligopolistic market?
Many sellers offering differentiated products
ExplanationHigh number of differentiated product sellers.
#14
In monopolistic competition, firms may engage in non-price competition, which refers to:
Competing based on product differentiation and advertising
ExplanationCompetition via product distinction and ads.
#15
Which market structure is characterized by low barriers to entry, product differentiation, and non-price competition?
Monopolistic competition
ExplanationMarket with easy entry, diverse products, and non-price rivalry.
#16
What is the main concern regarding monopolies in terms of market efficiency?
Allocative inefficiency
ExplanationResource misallocation due to monopoly power.
#17
What is a government's typical response to a natural monopoly?
Regulating prices and output
ExplanationControlling prices and production.