Competition Test

A monopoly controls the market price by controlling supplies.

• True

• False

The presence of many sellers and buyers is a condition for a pure monopoly.

• True

• False

Most U.S. businesses represent some form of imperfect competition.

• True

• False

In a situation of monopolistic competition, the leading companies in an industry have as much control over price as a company with a pure monopoly.

• True

• False

In a perfectly competitive market, prices are set by the interaction of buyers and sellers.

• True

• False

In imperfect competition, advertising is most important to monopolistic competition.

• True

• False

Prices in monopolistic competition can be most influenced by:

• A. state governments

• B. corporate structure

• C. product differentiation

• D. store management

A characteristic of a pure monopoly is:

• A. numerous sellers in the market

• B. substitute good or service is available

• C. easy entry into the market for competitors

• D. almost complete control of market price

A characteristic of an oligopoly is:

• A. domination by a few sellers

• B. no barriers to entry for competitors

• C. competition is based solely on price

• D. substitute good or service is available

A characteristic of perfect competition is:

• A. a small market

• B. identical products

• C. difficult entry to market for competitors

• D. some control over the price of goods being sold