Market Structures Review

What is a characteristic feature of a market under perfect competition regarding the number of buyers and sellers?

• There are only a few buyers and many sellers.

• There are numerous buyers and sellers.

• There is one dominant buyer and many sellers.

• There are many buyers but only one seller.

In a perfectly competitive market, how does the product offered by different sellers compare?

• Products are differentiated and unique.

• Products are similar but not identical.

• Products are completely different.

• Products are similar and largely indistinguishable.

Who controls the price in a perfectly competitive market?

• The government sets the prices.

• A single seller or buyer has control over the price.

• Supply and demand determine the price.

• Prices are negotiated between buyers and sellers.

What is one of the impacts of perfect competition on prices?

• Prices are high due to monopolistic control

• Prices are low due to competition

• Prices are set by the government

• Prices are unpredictable and volatile

How are industries affected by perfect competition?

• Industries become monopolized

• Industries are inefficient

• Industries are efficient

• Industries are regulated by the government

How does a Pure Monopoly control the market price?

• By allowing free competition

• By controlling the supply of a good or service

• By having multiple sellers in the market

• By promoting substitutes

What creates high barriers to entry into the market in a Pure Monopoly?

• Low government regulation

• Small investment requirements

• Availability of raw materials

• Government regulation, large investment, and ownership of raw materials

What is a Natural Monopoly?

• A monopoly where the seller has a patent.

• A monopoly that is created by legal barriers to entry.

• A monopoly that produces products for the lowest cost and can force others out of business.

• A monopoly that is the only grocery store in a small town.

What is a Technological Monopoly?

• A monopoly that is the only grocery store in a small town.

• A monopoly that produces products for the lowest cost.

• A monopoly that is created by legal barriers to entry.

• A monopoly where the seller has a patent, an exclusive right to manufacture an invention for a certain number of years.

What is an oligopoly?

• An industry dominated by a single supplier with complete control over price

• An industry in which a few suppliers that exercise some control over price dominate

• An industry with perfect competition and no control over price

• An industry where many small firms have a significant control over the market