3. Introduction to market structure

How many sellers are there in a perfectly competitive market?

A. One

B. Few

C. Many

D. Two

C. Many

What type of products are sold under perfect competition?
A. Unique products
B. Differentiated products
C. Luxury products
D. Homogeneous/standardized products

D. Homogeneous/standardized products

What is the level of barriers to entry in perfect competition?

A. Very low

B. High

C. Very high

D. Considerable

A. Very low

What is the pricing power of a firm under perfect competition?

A. Considerable

B. Some

C. None

D. Very high

C. None

What is the level of non-price competition in perfect competition?

A. High

B. None

C. Considerable

D. Some

B. None

What type of demand curve does a perfectly competitive firm face?

A. Kinked

B. Inelastic

C. Downward-sloping

D. Perfectly elastic

D. Perfectly elastic

How efficient is perfect competition in terms of allocative and productive efficiency?

A. Highly efficient

B. Inefficient

C. Less efficient than monopolistic competition

D. Somewhat efficient

A. Highly efficient

What are the long-run profits under perfect competition?

A. High

B. Positive

C. Zero

D. Considerable

C. Zero

How many sellers are there in monopolistic competition?

A. One

B. Many

C. Few

D. Two

B. Many

What type of products are sold under monopolistic competition?

A. Homogeneous products

B. Standardized products

C. Differentiated products

D. Identical products

C. Differentiated products

What is the level of barriers to entry in monopolistic competition?

A. Very high

B. High

C. Considerable

D. Low

D. Low

What is the pricing power of a firm under monopolistic competition?

A. None

B. Some

C. Very high

D. Perfectly elastic

B. Some

Which is an important form of non-price competition under monopolistic competition?

A. Advertising and product differentiation

B. Government regulation

C. Production quotas

D. No competition

A. Advertising and product differentiation

Which best describes the demand curve of a monopolistically competitive firm?

A. Perfectly elastic at all prices

B. Perfectly inelastic

C. Elastic over some price ranges and inelastic over others

D. Always vertical

C. Elastic over some price ranges and inelastic over others

Compared with perfect competition, monopolistic competition is:

A. Highly efficient

B. Less efficient

C. Equally efficient

D. Completely efficient

B. Less efficient

What are the long-run profits under monopolistic competition?

A. High

B. Positive

C. Considerable

D. Zero

D. Zero

How many sellers are there in an oligopoly?

A. Many

B. One

C. Few

D. Unlimited

C. Few

Products in an oligopoly can be:

A. Only differentiated

B. Homogeneous/standardized

C. Only unique

D. Non-existent

B. Homogeneous/standardized

What is the level of barriers to entry in an oligopoly?

A. Very low

B. Low

C. None

D. High

D. High

What is the pricing power of an oligopolistic firm?

A. None

B. Some or considerable

C. Very low

D. Perfectly competitive

B. Some or considerable

Which is an example of non-price competition in an oligopoly?

A. Advertising and product differentiation

B. No advertising

C. Only price competition

D. Government regulation

A. Advertising and product differentiation

Which type of demand curve is commonly associated with an oligopoly?

A. Perfectly elastic demand

B. Horizontal demand

C. Kinked demand

D. Perfectly inelastic demand

C. Kinked demand

Compared with perfect competition, an oligopoly is generally:

A. Highly efficient

B. More efficient

C. Less efficient

D. Perfectly efficient

C. Less efficient

What are the long-run profits under an oligopoly according to the table?

A. Zero

B. Positive

C. Negative

D. Always high

B. Positive

How many sellers are there in a monopoly?

A. Many

B. Few

C. One

D. Two

C. One

What type of product does a monopolist sell?

A. A unique product

B. A homogeneous product

C. A standardized product

D. An identical product

A. A unique product

What is the level of barriers to entry in a monopoly?
A. Low
B. Very high
C. Very low
D. None

B. Very high

What is the pricing power of a monopolist?

A. None

B. Some

C. Low

D. Considerable

D. Considerable

Which is a form of non-price competition associated with monopoly in the table?

A. Advertising

B. Product differentiation

C. Price taking

D. None

A. Advertising

What type of demand curve does a monopolist face according to the table?

A. Perfectly elastic

B. Kinked

C. Inelastic

D. Horizontal

C. Inelastic

Compared with perfect competition, monopoly is:

A. Highly efficient

B. Inefficient

C. More efficient

D. Equally efficient

B. Inefficient

What are the long-run profits under monopoly according to the table?

A. Zero

B. Negative

C. Positive

D. High

D. High

Which market structure has only one seller?

A. Oligopoly

B. Monopoly

C. Perfect competition

D. Monopolistic competition

B. Monopoly

Which market structure has a few sellers?

A. Monopoly

B. Perfect competition

C. Oligopoly

D. Monopolistic competition

C. Oligopoly

Which market structure has many sellers and homogeneous products?

A. Perfect competition

B. Monopoly

C. Oligopoly

D. Monopolistic competition

A. Perfect competition

Which market structure has many sellers and differentiated products?

A. Monopoly

B. Oligopoly

C. Perfect competition

D. Monopolistic competition

D. Monopolistic competition

Which market structure has very low barriers to entry?

A. Monopoly

B. Oligopoly

C. Perfect competition

D. Monopolistic competition

C. Perfect competition

Which market structure has very high barriers to entry?

A. Monopoly

B. Perfect competition

C. Monopolistic competition

D. Oligopoly

A. Monopoly

In which market structure does a firm have no pricing power?

A. Monopoly

B. Perfect competition

C. Oligopoly

D. Monopolistic competition

B. Perfect competition

Which market structure gives firms considerable pricing power?

A. Monopoly

B. Perfect competition

C. Monopolistic competition

D. Oligopoly

A. Monopoly

Which market structure has a perfectly elastic demand curve for the individual firm?

A. Monopoly

B. Oligopoly

C. Perfect competition

D. Monopolistic competition

C. Perfect competition

Which market structure is associated with a kinked demand curve?

A. Monopoly

B. Oligopoly

C. Perfect competition

D. Monopolistic competition

B. Oligopoly

Which market structure is highly efficient?

A. Monopoly

B. Oligopoly

C. Monopolistic competition

D. Perfect competition

D. Perfect competition

Which market structure is described as inefficient in the table?

A. Monopoly

B. Perfect competition

C. Oligopoly

D. Monopolistic competition

A. Monopoly

According to the table, which market structure has positive long-run profits?

A. Perfect competition

B. Oligopoly

C. Monopolistic competition

D. Both B and C

B. Oligopoly

A market has many firms, differentiated products, and low barriers to entry. What type of market is this?

A. Monopoly

B. Oligopoly

C. Perfect competition

D. Monopolistic competition

D. Monopolistic competition

A market has a few firms, high barriers to entry, and firms have some or considerable pricing power. What type of market is this?

A. Oligopoly

B. Monopoly

C. Perfect competition

D. Monopolistic competition

A. Oligopoly

A firm is a price taker and faces a perfectly elastic demand curve. Which market structure is it most likely operating in?

A. Monopoly

B. Oligopoly

C. Perfect competition

D. Monopolistic competition

C. Perfect competition

Advertising and product differentiation are especially important in which market structure?

A. Perfect competition

B. Monopolistic competition

C. Monopoly only

D. None of the above

B. Monopolistic competition

A market has one seller, a unique product, and very high barriers to entry. What type of market is this?

A. Oligopoly

B. Monopolistic competition

C. Perfect competition

D. Monopoly

D. Monopoly

Which sequence correctly ranks market structures from the greatest number of sellers to the fewest?

A. Monopoly → Oligopoly → Monopolistic Competition → Perfect Competition

B. Perfect Competition → Monopolistic Competition → Oligopoly → Monopoly

C. Oligopoly → Monopoly → Perfect Competition → Monopolistic Competition

D. Monopolistic Competition → Monopoly → Oligopoly → Perfect Competition

B. Perfect Competition → Monopolistic Competition → Oligopoly → Monopoly

Which sequence correctly ranks market structures from the lowest barriers to entry to the highest?

A. Perfect Competition → Monopolistic Competition → Oligopoly → Monopoly

B. Monopoly → Oligopoly → Monopolistic Competition → Perfect Competition

C. Oligopoly → Monopoly → Perfect Competition → Monopolistic Competition

D. Monopolistic Competition → Perfect Competition → Monopoly → Oligopoly

A. Perfect Competition → Monopolistic Competition → Oligopoly → Monopoly

Which market structure has a unique product according to the table?

A. Perfect competition

B. Oligopoly

C. Monopoly

D. Monopolistic competition

C. Monopoly

A firm has no pricing power and must accept the market price. Which market structure does this describe?

A. Monopoly

B. Oligopoly

C. Monopolistic competition

D. Perfect competition

D. Perfect competition

Which combination best describes a monopoly?

A. Many sellers + homogeneous products

B. One seller + unique product + very high barriers

C. Few sellers + high barriers

D. Many sellers + differentiated products

B. One seller + unique product + very high barriers