Econ Chapter 7 Market Structures

One of the requirements for a monopoly is that

• products are high priced

• there are several close substitutes for the product

• there is a unique product with no close substitutes

• the product cannot be produced by small firms

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

Which market has no competition?

• perfect competition
• oligopoly
• monopoly
• monopolistic competition

A perfect competitive firm charges a price that is ____________.

• different to other firms

• higher than other firms

• lower than other firms

• similar to other firms

Which of the following is not a characteristic of a competitive market?

• There are many buyers and sellers in the market.

• The goods offered for sale are largely the same.

• Firms generate small but positive economic profits in the long run.

• Firms can freely enter or exit the market.

• Monopoly

• Oligopoly

• Oligopsony

• Monopsony

Which of the following best describes an oligopoly?

• many monopolistically competitive firms

• a few firms sharing monopoly power

• a former monopoly that has been broken up by the government

• a government-granted franchise or monopoly

Collusion most frequently occurs in industries that are

• oligopolistic

• monopolistically competitive

• monopolistic

• perfectly competitive

T or F Would Pepsi and Coke conspire together to make prices?

• True

• False

Would car companies be in the oligopoly industry

• Yes

• No