PBMF 2.2 Government and the Economy

Under perfect competition,

• products are similar but not identical.
• numerous restrictions prevent firms from entering the market.
• no seller can sell a product above the prevailing market price.
• a single seller can affect price.

Which market has no competition?

• perfect competition
• oligopoly
• monopoly
• monopolistic competition

Which market structure is BEST indicated by the soda market?

• monopoly
• pure competition
• oligopoly
• natural monopoly

Which scenario is an example of a monopoly? 

• A local water company is the sole provider of water for a small town.
• A dry cleaner specializes in environmentally friendly cleaning methods.  
• A farmer produces green beans for sale at a farmer's market.
• A small number of cereal companies produce most of the cereal on the market.

An industry that is dominated by a few large firms is 

• monopolistic competition.
• a monopoly.
• perfect competition.
• an oligopoly.

The actions of an individual seller do not affect the overall supply or price of a good or service.

• Perfect Competition

• Pure Monopoly

• Monopolistic Competition

• Oligopoly

Firms in this kind of market produce goods that are very close substitutes.

• Perfect Competition

• Pure Monopoly

• Monopolistic Competition

• Oligopoly

Oligopoly

• market structure in which only a few large sellers dominate and have the ability to affect prices in an industry

• market structure having all conditions of pure competition except for identical products

• market structure in which a firm has a monopoly because of its location or the small size of the market

• monopoly created and or owned by the government

Define collusion

• When two cars collide on the road
• a secret agreement between two competing firms to sell their similar products at the same price
• a secret meeting
• when one business buys another one that sells similar products

The law that first made it illegal for large companies to form monopolies is the

• ICC
• Anti-Monopoly Law
• Sherman Antitrust Act
• Clayton Act