AQA Microeconomics- Market Structures Comparison

Use the following statements to answer this question:

I. Markets that have only a few sellers cannot be highly competitive.

II. Markets with many sellers are always perfectly competitive.

• I and II are true.

• I is true and II is false.

• II is true and I is false.

• I and II are false.

The shaded area in the graph shows:

• the increase in profit when output is reduced from 8 to 7 units of output.

• the profit that could be made if output increases from 7 to 8 units of output.

• the deadweight loss associated with the power of the price taking firm.

• the amount of profit when 8 units of output are produced.

In monopolistic competition there are many buyers and sellers

• True
• False

In which market structure is there the LEAST competition?

• Monopoly
• Oligopoly
• Monopolistic Competition
• Perfect Competition

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.

This market structure has 3-4 firms who dominate 70-80% of the industry. 

• Monopoly
• Monopolistic Competitio
• Perfect Competitio
• Oligopoly 

List the four market structures in order from least competitive to most competitive.

• Oligopoly, Monopoly, Perfect Competition, Monopolistic Competition
• Perfect Competition, Oligopoly, Monopoly, Monopolistic Competition
• Monopoly, Oligopoly, Monopolistic Competition, Perfect Competition
• Monopoly, Monopolistic Competition, Perfect Competition, Oligopoly

Google controls 67% of the web search market. The company has grown and branched off into email, online maps, GPS tracking systems, online data storage and mobile phones. There are competitors like Microsoft and Yahoo, but they own just 18% and 11% of the market, respectively. Which market structure(s) best fit Google? (There are two possible answers, pick both)

• Perfect competition

• Monopolistic competition

• Oligopoly

• Monopoly

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

• price leadership.

• low barriers to entry.

• collusion.

• cartels.

Economists usually call an industry an oligopoly if

• the four largest firms produce at least 70–80 percent of the output.

• only one product is available on the market.

• the ten largest firms produce less than 50 percent of the output.

• there is one firm that produces 100 percent of the output.