Chapter 6 Market Structures

How many firms are there in a perfect competition?

• 1
• 2-5
• Many

True or False: A perfect competition assumes that all firms sell the same product for different prices.

• True
• False

Why does no one firm dominate in a perfect competition?

• No firm wants to
• Each firm sells to different people
• Each firm produces so little of the total supply that they cannot influence prices
• One firm will eventually dominate and make it a monopoly

True or false: Sellers are able to enter and exit the market freely in a perfect competition,

• True
• False

Factors that make it difficult for new firms to enter a market are called

• Barriers to entry
• Factors of production
• Limited supply
• Monopolistic Outlook

How many firms are there in a monopoly?

• 1
• 2-5
• Many

What prevents firms from entering a monopoly?

• Barriers
• Technology
• Price
• The government

True or false: There is a variety of goods present in a monopoly.

• True
• False

Cartels are illegal in the United States.

• True
• False

Which of the following helps oligopolistic firms decrease competition and increase profit? 

• creating a surplus 
• decreasing barriers to entry 
• collusion
• increasing product differentiation