Market Structure Economics

If several firms decide together to set the market price below their costs for the short term to drive competitors out of business, they are participating in

• predatory pricing.

• price discrimination.

• differentiation.

• economies of scale.

A market that is an oligopoly has

• many buyers and sellers.

• many firms selling slightly different products.

• a few firms dominating the market.

• one seller and many buyers.

One role of the federal government's Justice Department is to

• encourage price fixing.

• break up monopolies.

• provide businesses with loans for start-up costs.

• eliminate all barriers to entry.

A natural monopoly is a market that runs most efficiently when it has

• few sellers and only one buyer.

• many sellers and many buyers.

• one large firm providing all output.

• few government regulations.

Public water is an example of a(n)

• oligopoly.

• natural monopoly.

• cartel.

• trust.

Government is concerned with all of the following practices of oligopolies EXCEPT

• price leadership.

• low barriers to entry.

• collusion.

• cartels.

A patent, a license to operate a business, and a franchise

• are given to anyone who applies for them.

• are only available in a perfect competition market structure.

• are ways that the government can create a monopoly.

• encourage low prices.

Which is an example of a commodity?

• sweater

• house

• milk

• automobile

Public outrage with powerful trusts in the late 1800s led Congress to

• pass anti-trust legislation.

• outlaw all price discrimination.

• deregulate many industries.

• pass laws that allowed the supplier to set the market price.

A firm with a natural monopoly

• is an example of perfect competition.

• offers may different goods and services.

• usually agrees to allow the government to control the price and service provided.

• is usually very inefficient.