Midterm revision sheet

In a perfectly competitive market, firms are

• Price makers

• Price takers

• Price influencers

• Price negotiators

A market with only one seller and no close substitutes is known as

• Oligopoly

• Perfect competition

• Monopoly

• Monopolistic competition

In which market structure do firms produce identical products?

• Monopolistic competition

• Oligopoly

• Monopoly

• Perfect competition

In monopolistic competition, firms differentiate their products to

• Increase market share

• Reduce competition

• Lower production costs

• Create barriers to entry

An example of an oligopoly would be the market for

• Wheat

• Gasoline

• Perfectly competitive goods

• Handcrafted jewelry

Which market structure typically has the least barriers to entry?

• Perfect competition

• Monopoly

• Oligopoly

• Monopolistic competition

In which market structure do firms face the most competition?

• Perfect competition

• Monopoly

• Oligopoly

• Monopolistic competition

A natural monopoly occurs when:

• A single firm dominates the market due to superior technology

• There are no barriers to entry in the market

• Multiple firms coexist with identical products

• Production costs decrease as output increases

What is a characteristic of monopolistic competition?

• High barriers to entry

• Identical products

• Many small firms

• Price takers

Which market structure is characterized by mutual interdependence among firms?

• Perfect competition

• Monopoly

• Oligopoly

• Monopolistic competition