Market Structures Review

An agreement among members of an oligopoly to set prices and production levels is called

• price leadership

• competition

• collusion

• imperfect monopoly

An example of a natural monopoly is

• company that makes pretzels

• your local water company

•  your barber

• a Midwest farm

An industry described as a monopolistic competition would have most likely have

• similar but differentiated products

• normal profits in the long run

•  one firm with no close rivals

• no opportunities of collusive behavior

What characteristics are true of an oligopoly (2 are correct)

• few large firms

• high entry and exit costs

• all products are identical

• no price control

The fact that you can buy shares in AT&T and Target makes them

• sole proprietorship 

• a cartel

• a partnership

• a corporation

Patents are a form of monopoly that society allows because they

• maintain an orderly way for companies to make a lot of money.

•  give companies the right to decide who will be allowed to use their products.

• set up a situation in which only a few manufacturers can control an industry.

• encourage firms and people to research new products that benefit society as a whole.

Your uncle owns a convenience store that has branches nationwide. His store is an example of a

• business franchise

• professional organization.

• multinational partnership

•  consumer cooperative

If two shops sell the same merchandise but one offers a higher level of service, the service distinction is a form of

• nonprice competition   

• choice among substitute products   

• price fixing

• local competition

If a general partnership fails, who is responsible for the debts?

• anyone who works for the partnership 

•  all of the partners 

• only the most senior general partner

• the state in which the business is operated

A shortage of a particular good is often a signal for a producer to

•  lower the production of that good.

• raise the prices of that good   

• lower the prices of that good.

• shift production to another good.