Review of Market Structures

Reorder the following markets to show sellers' market power from GREATEST to LEAST.

• Monopoly

• Oligopoly

• Monopolistic Competition

• Pure Competition

Reorder the following markets to show barriers to entry from LEAST to GREATEST.

• Pure Competiton

• Monopolistic Competition

• Oligopoly

• Monopoly

Label the continuum of market structures.

a

b

c

d

Oligopoly

Monopoly

Pure Competition

Monopolistic Competition

"obstacles or hindrances that make it difficult for new companies to enter a given market...may include technology challenges, government regulations, patents, start-up costs, or education and licensing requirements."

Which characteristic of a market is the quote describing?

• price control

• barriers to entry

• amount of competition

• number of sellers

Select TWO benefits of competition in a market.

• higher prices

• inferior products & services

• innovative products & services

• lower prices

True or False: The US government has no laws against unfair competition in the market.

• True

• False

Answer explanation

The Antitrust Division has more civil antitrust lawsuits in litigation than at any time in recent memory, and several mergers have been abandoned after they attracted the Division's scrutiny.

Which type of market structure is being described in the following quote?

"To make matters worse, health care consolidation has led to the absence of any choice at all for consumers. Another study by Harvard University on hospital markets found that between 2007-2017, 11.2 million Americans were served by just a single hospital system."

• Sole Proprietorship

• Monopolistic Competition

• Monopoly

• Oligopoly

The State of California filed suit against three pharmaceutical companies, Eli Lilly, Novo Nordisk, and Sanofi, which supply 90% of global insulin. Which market structure does this most closely resemble?

• Perfect Competition

• Monopolistic Competition

• Monopoly

• Oligopoly

Which of the following is the reason firms have little price control in a perfectly competitive market?

• High barriers make it difficult for firms to enter the market.

• Supplied products are exactly the same, so buyers purchase where the price is lowest.

• Low barriers reduce profit motive, so there are fewer sellers.

Match the following definition or image to the correct term.

• price takers

• 
• low barriers

• 
• high barriers

• Firms can dictate the price it charges for its goods because there are no substitutes.

• price makers

• Firms cannot influence the market price of their products.