Econ Ch7 Market Structures

Characteristics of perfect competition include

• a large number of buyers and sellers

• one firm dominates

• a few firms dominate

• competition is missing

In natural monopolies, the price they can charge is

• left up to the markets to decide

• controlled by the US government

• regulated by the Public Utilities Commission

• voted on by their stockholders

Which of the following industries have been deregulated in recent years?

• low cost housing

• pharmaceuticals

• steel

• airlines

When a major airline lowers its prices, other airlines will probably

• maintain existing prices

• raise their prices

• go out of business

• lower their prices

A monopoly based on the absence of other sellers in a certain location is called

• an oligopoly

• a geographic monopoly

• a natural monopoly

• a locational monopoly

A monopoly's prices are determined by

• competing firms

• market equilibrium

• perfect competition

• the monopoly itself

What is monopolisitc competition?

• one company selling identical products under different names

• many companies selling similar but not identical products

• a very few companies selling identical products

• one company selling different products under different names

If a firm enjoys economies of scale,

• its profits will increase as production increases

• its profits will decrease as production increases

• it is in perfect competition

• costs will rise as production goes up

The government takes part in the US economy to

• encourage competition and fair play

• reduce the effects of imperfect competition

• regulate industries that serve the public good

• all of these are correct

An agreement among firms to divide the market or set prices is known as collusion.

• True

• False