Market Structures

What is the main characteristic of a perfectly competitive market?

• Few buyers and sellers with differentiated products

• Imperfect information and high barriers to entry

• Many buyers and sellers with homogeneous products, perfect information, low barriers to entry and exit, and no market power.

• Market power and monopolistic competition

In which market structure does a single firm dominate the market?

• Oligopoly

• Monopoly

• Perfect Competition

• Monopsony

Is the airline industry an example that exhibits an oligopoly?

• Yes

• No

How does monopolistic competition differ from perfect competition?

• Monopolistic competition involves identical products and no market power.

• Perfect competition involves product differentiation and some market power.

• Monopolistic competition involves high barriers to entry and few firms in the market.

• Monopolistic competition involves product differentiation and some market power, while perfect competition involves identical products and no market power.

What term is used to describe a firm's ability to influence the market price of its product?

• Price control

• Demand elasticity

• Market power

• Monopoly power