Economics Unit 2 Test Review

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 and products are identical

• a single seller can affect price and their is a small number of buyers and sellers

Which market structure is BEST indicated by the cell phone market?

• monopoly

• pure competition

• oligopoly

• natural monopoly

A market that has a few sellers of basically the same goods.

• Perfect Competition

• Pure Monopoly

• Monopolistic Competition

• Oligopoly

A market where brand-name loyalty is more important than product differentiation.

• Perfect Competition

• Pure Monopoly

• Monopolistic Competition

• Oligopoly

Which of the following best describes an oligopistic market?

• Many sellers with identical barriers to entry

• Many sellers, each with a clearly differentiated product, and no barriers to entry

• A few competing sellers with similar products and high barriers to entry

• A few competing sellers of identical products and no barriers to entry

• No competition among sellers and high barriers to entry

A barrier to entry is

• an economic term for economies of scale

• illegal in most markets

• anything that prevents new firms from entering the market

• a factor that increases competition

A monopoly is a market with

• many suppliers

• no barriers to entry

• many substitutes

• one supplier

A monopolist is

• a price taker

• able to ignore the demand for its product when setting price

• able to set the price for its product since they are the only one that has a product

• able to earn only a normal profit in the long run

An industry that is dominated by a few large firms is 

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

Which market structure is BEST indicated by the soda market?

• monopoly
• pure competition
• oligopoly
• natural monopoly