Unit 4.1 AP Micro

In which market structure are firms considered "price takers"?

• Monopolistic Competition

• Oligopoly

• Perfect Competition

• Monopoly

What is a common characteristic of monopolistic competition AND perfect competition?

• No barriers to entry

• Identical products

• To make long-run profit

• Collusion among firms

In which market structure is price discrimination most likely to occur?

• Oligopoly

• Monopolistic competition

• Perfect competition

• Monopoly

In which market structure do firms typically operate with excess capacity?

• Perfect competition

• Monopolistic competition

• Monopoly

• Oligopoly

In which market structure are firms both productively and allocatively efficient in the long run?

• Monopoly

• Oligopoly

• Perfect competition

• Monopolistic competition

In which market structure is the concept of "excess capacity" most relevant?

• Monopoly

• Oligopoly

• Monopolistic competition

• perfect competition

In which market structure does advertising play the most significant role, and why?

• Monopoly, as it is essential to maintain high prices

• Perfect competition, to create product differentiation

• Oligopoly, to signal quality and attract customers

• Monopolistic competition, to differentiate products and influence customer preference

In monopolistic competition, firms can earn long-run profit

• True

• False

Collusion is illegal in the United States

• True

• False

Monopolies are both productively and allocatively efficient in the long run

• True

• False