What is a market?

What kind of market runs most efficiently when one large firm supplies all of the output?

• a natural monopoly

• a network

• perfect competition

• imperfect competition

What is one kind of monopoly that the U.S. government generally permits?

• the electric company

• professional sports leagues

• Computer companies

• Standard Oil

What is monopolistic competition?

• one company selling the identical product under different names

• one company selling several different products under different names

• a very few companies selling identical products

• many companies selling similar but not identical products

Which of the following is NOT a form of non-price competition?

• location

• physical characteristics

• advertising

• discounts

What happens to a monopolistically competitive firm that begins to charge an excessive price for its product?

• The firm will go out of business.

• Consumers will substitute a rival’s product.

• Consumers will boycott the product.

• The government will regulate the price.

Which of the following is NOT a condition for perfect competition?

• Many buyers and sellers participate in the market.

• Sellers offer a wide variety of products.

• Buyers and sellers are well informed about products.

• Sellers are able to enter and exit the market freely.

What do patents and copyrights create?

• Temporary monopolies

• Perfect competition

• Natural Monopolies 

• Differentiated competition 

Cartels are difficult to operate for which of the following reasons?

• They work only if members keep to their agreed output.

• They are illegal worldwide.

• Firms in a cartel are likely to lose money.

• The products are perfectly competitive.

What is the definition of an oligopoly?

• one firm producing 95 percent of the output

• two to four firms producing 70 percent to 80 percent of the output

• eight to ten firms producing 60 percent to 70 percent of the output

• eight to ten firms producing 90 percent of the output