Market Structure Quiz

Economists define market structure according to four main characteristics: number of producers, similarity of products, ease of entry, and

• brand loyalty.

• control over prices.

• monopolistic competition.

• perfect competition.

The most competitive market structure is

• monopolistic competition.

• oligopoly.

• perfect competition.

• monopoly.

Barriers to entry are

• market structures in which producers have some control over the price of their products.

• obstacles that can restrict access to a market and limit competition.

• producers who must accept the market price for their product.

• the costs of shopping around for the best product at the best price.

Nearly perfect markets are beneficial because producers are as efficient as possible and

• consumers do not pay more for a product than it is worth.

• the price of a product bears no relationship to its production costs.

• producers can sell at any price they choose.

• the quantity of goods produced is restricted.

A monopoly can best be summed up as

• many producers, identical products

• few producers, similar products

• many producers, similar but varied products

• one producer, a unique product

Which of the following is an example of a natural monopoly?

• the water system that serves the greater Boston metropolitan area

• millionaire John D. Rockefeller’s Standard Oil Company

• the only sandstone quarry in Menomonie, Wisconsin

• author J.K. Rowling’s copyright for her Harry Potter novels

What is a contract issued by a government entity that gives a firm a sole right to provide a good or service in a certain area?

• a copyright

• a license

• a patent

• a public franchise

An oligopoly is a market or an industry

• that is dominated by just a few firms that produce similar or identical products.

• in which a large number of firms produce essentially the same product.

• that consists of a single producer of a product that has no close substitutes.

• in which a large number of producers provide goods that are similar but varied.

Oligopolies may sometimes act like monopolies when they use cooperative pricing. Which form of cooperative pricing is legal in the United States?

• cartel formation

• collusion

• price leadership

• all of the above

Which of the following is a modern cartel?

• Coca-Cola, Pepsi, and Dr Pepper Snapple Group

• Microsoft

• Organization of Petroleum Exporting Countries

• Standard Oil Company