Economics Unit 3 Types of Markets and Competition

What is an oligopoly?

• It is a market structure in which products are always similar.

• It is a market structure in which a very few large sellers dominate the industry.

• It is a market structure in which one seller controls the industry.

• It is a market structure in which prices are similar between sellers.

Selling standard, similar or rather same products is the characteristics for:

• Monopoly

• Monopolistic Competitive Market

• Oligopoly

• Perfectly Competitive Market

Which of the following statements correctly identifies a difference between perfect competition and monopolistic competition? 

• In perfect competition there are no barriers to entry, but there are strong barriers in monopolistic competition. 
• In perfect competition there are many firms, but in monopolistic competition there are only a few firms. 
• In perfect competition the firms all sell products that are exactly the same, but in monopolistic competition each firm sells a slightly differentiated product. 
• In perfect competition there are few consumers, but in monopolistic competition there are many consumers. 

Since the airline industry is controlled by only a few very big companies, which type of market structure would best describe it.

• Monopoly
• Perfect Competition
• Monopolistic Competition
• Oligopoly

DeBeers used to be the only supplier of diamonds. Which terms best describes this firm?

• Merger

• Monopolistic Competition

• Monopoly

• Oligopoly

The town of Utopia has three gas stations. The owners of these gas stations make decisions together about when to raise and lower gas prices. It would be difficult for another gas station to enter this market. Which market structure best describes the market for gas in Utopia?

• Perfect competition
• Monopolistic competition
• Oligopoly
• Monopoly

List the four market structures in order from least competitive to most competitive.

• Oligopoly, Monopoly, Perfect Competition, Monopolistic Competition
• Perfect Competition, Oligopoly, Monopoly, Monopolistic Competition
• Monopoly, Oligopoly, Monopolistic Competition, Perfect Competition
• Monopoly, Monopolistic Competition, Perfect Competition, Oligopoly

There are many sellers of blue jeans.  Each blue jean seller makes their product slightly different to set it apart from others. There is free entry and exit into the blue jean market. Which market structure does this describe?

• Perfect Competition
• Oligopoly
• Monopoly
• Monopolistic Competition

Which is NOT a characteristic of a monopoly?

• Seller sets the market price
• Entry into the market is easy
• Firm sells a unique product
• One seller

In which market structure does a firm have greatest control over its product’s price?

• perfect competition
• monopoly
• oligopoly
• monopolistic competition