ECON 11 Chapter 5 Market Power

Which of the following are examples of uncompetitive (imperfect) markets?

• Monopoly

• Duopoly

• Oligopoly

• Monopolistic Competition

• Perfectly Competition

Which of the following characteristics apply to imperfect markets?

• Large number of firms

• Individual firms have market power

• A small degree of product differentiation

• Homogeneous products

• High barriers to entry of new firms

In Australia, the market concentration ratio (CR) in the retail/supermarket industry based on the latest data in the graph (note: updated from the case study you worked on)

• CR2 = 62%

• CR2 = 80%

• CR = 34%

• CR = 33%

Based on the graph given, the best description of the market structure for the supermarket industry in Australia is that it is a ...

• Monopoly

• Oligopoly

• Monopolistic Competition

• Perfectly Competitive Market

A legal, technological or economic factor that prevents new firms from entering a market to take advantage of high prices is called a ...

• License

• Barrier to Entry

• Price Ceiling

• Anti-Competitive Behaviour

Which of the following barriers to entry could NOT be eliminated if companies were forced to share access to resources/technology with their competitors on commercial terms (in exchange for a fee)?

• Control of key transport infrastructure (such as a port)

• Control of the supply of a key natural resource

• A patent on production technology that allows for lower cost of production

• The lower cost of production that arises from achieving economies of scale

In the case of a legal monopoly, the best solution to correcting the market failure is ...

• For government to set a price ceiling above the price the monopoly is charging

• For government to set a price floor above the market equilibrium price

• For government to ammend the law to allow other companies to enter the market

• For government to give a subsidy to the monopoly in order to reduce the cost of production

Which of the following is most likely to increase if a monopoly is not regulated by the government?

• The quantity produced and consumed

• Consumer surplus

• Total Surplus

• Producer Surplus

The practice of lowering prices in order to drive competing firms (who cannot produce at low cost) out of the market, after which prices are once again raised is called ...

• Predatory Pricing

• Collusion

• Resale Price Maintenance

• A Cartel

Which of the following is a CARTEL aimed at manipulating the world price for crude oil?

• ASEAN

• OPEC

• WTO

• ACCC