Types of Competition

Perfectly competitive markets sell

• differentiated products

• homogenous products

• a combination of differentiated and homogenous products

The market demand curve for a perfectly competitive industry is

• horizontal

• downward sloping

• vertical

• upward sloping

All firms will maximize profit where

• MR = MC

• MR > MC

• MR < MC

Which of the following is not a problem that we see with monopolies?

• higher prices

• lower output

• rent seeking

• innovation

Monopolies are guaranteed to make a profit.

• True

• False

A key characteristic of monopolistically competitive firms is

• barriers to entry

• few buyers and sellers

• differentiated products

• long-run economic profits

A key characteristic of oligopolistic firms is

• no barriers to entry or exit

• interdependence between firms

• no long run economic profits

• differentiated products

A primary goal of a cartel is to

• increase demand to increase member profits

• increase market concentration

• decrease market concentration

• decrease supply to increase member profits

Which type of market is the least competitive?

• perfect competition

• monopolistic competition

• oligopoly

• monopoly

In general, markets in the U.S. are becoming ________ competitive.

• less

• more