Understanding Oligopoly Markets

Understanding Oligopoly Markets

10th Grade

15 Qs

quiz-placeholder

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Understanding Oligopoly Markets

Understanding Oligopoly Markets

Assessment

Quiz

Other

10th Grade

Easy

Created by

julia thomson

Used 4+ times

FREE Resource

15 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

What is an oligopoly?

A market with many small firms

A market where a few large firms control the majority

A market with only one firm

A market with perfect competition

Answer explanation

An oligopoly is characterized by a market dominated by a few large firms, which have significant control over prices and production. This distinguishes it from markets with many small firms or a single firm.

2.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which of the following is a main feature of an oligopoly?

Many small firms

No barriers to entry

Few large firms dominate the market

Identical products

Answer explanation

An oligopoly is characterized by a market dominated by a few large firms, which can influence prices and output. This contrasts with many small firms or no barriers to entry, making 'Few large firms dominate the market' the correct choice.

3.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

What is meant by 'barriers to entry' in an oligopoly?

Easy for new companies to enter the market

High costs or strict regulations make it difficult for new companies to enter

No restrictions for new companies

Only small firms can enter the market

Answer explanation

'Barriers to entry' in an oligopoly refer to high costs or strict regulations that make it difficult for new companies to enter the market, protecting existing firms from competition.

4.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

How do companies in an oligopoly often compete without changing prices?

By reducing product quality

Through non-price competition like advertising and promotions

By increasing prices

By merging with other companies

Answer explanation

In an oligopoly, companies often engage in non-price competition, such as advertising and promotions, to attract customers without altering prices. This strategy helps maintain market stability while differentiating their products.

5.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

What is 'collusion' in the context of an oligopoly?

Companies independently setting prices

Companies secretly agreeing to control prices or markets

Companies competing fairly

Companies lowering prices to attract customers

Answer explanation

In an oligopoly, 'collusion' refers to companies secretly agreeing to control prices or markets, undermining competition. This is different from independent pricing or fair competition, making the correct choice about collusion clear.

6.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which of the following is a disadvantage of an oligopoly for consumers?

High level of product variety

Limited choice compared to more competitive markets

Low prices due to competition

High level of innovation

Answer explanation

In an oligopoly, a few firms dominate the market, leading to limited choices for consumers compared to more competitive markets where many firms offer diverse products.

7.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

What might companies in an oligopoly do to attract customers besides lowering prices?

Reduce product quality

Increase advertising and promotions

Stop producing new products

Increase prices

Answer explanation

In an oligopoly, companies can attract customers by increasing advertising and promotions to differentiate their products and enhance brand loyalty, rather than just competing on price.

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