Microeconomics: Market Structures

There is no single seller or buyer can influence the change in market price of a product.

• Pure Competition

• Monopolistic Competition

• Pure Monopoly

There is a large number of independent sellers.

• Oligopoly

• Monopoly

• Pure Competition

What is the difference between perfect competition and monopolistic competition?

• Perfect competition has no barriers to entry, while monopolistic competition does.

• In perfect competition, firms produce identical goods, while in monopolistic competition, firms produce slightly different goods.

• Perfect competition has barriers to entry while monopolistic competition does not

The market type known as perfect competition is____

• highly competitive and firms find it impossible to earn an economic profit in the long run

• marked by firms continuously trying to change their products so that consumers prefer their product to their competitors' products.

• dominated by fierce advertising campaigns

Which of the following is the best example of a perfectly competitive market?

• soft drinks

• diamonds

• farming

Perfectly competitive firms are price takers because

• each firm is very large

• many other firms produce identical products.

• there are no good substitutes for their goods

One of the requirements for a monopoly is that

• there is a unique product with no close substitutes

• the product cannot be produced by small firms.

• there are several close substitutes for the product

An industry with a large number of firms, differentiated products, and free entry and exit is called

• oligopoly

• monopolistic competition

• monopoly

In perfect competition, a firm maximizes profit in the short run by deciding

• what price to charge

• whether or not to enter a market

• how much output to produce

A price-taking firm

• cannot influence the price of the product it sells

• sets the product's price to whatever level the owner decides upon

• talks to rival firms to determine the best price for all of them to charge