Understanding Imperfect Competition

What is imperfect competition?

• A type of market where prices are fixed and cannot change.

• A situation where all firms sell identical products with no market power.

• A market structure with only one seller and no competition.

• A market structure where many firms sell similar but not identical products, allowing for some degree of market power.

Define a monopoly market structure.

• A monopoly is a market structure with multiple sellers competing for the same product.

• A monopoly is a market structure where a single seller controls the entire supply of a product or service, with no close substitutes.

• A monopoly occurs when a government regulates the prices of goods and services.

• A monopoly is defined as a market where consumers have many choices and low prices.

What are high barriers to entry?

• High barriers to entry are strategies used by existing companies to lower their prices.

• High barriers to entry are incentives for new competitors to join a market.

• High barriers to entry are obstacles that prevent new competitors from easily entering a market.

• High barriers to entry are regulations that promote competition.

What are some potential negative consequences of monopolies?

• Higher prices, reduced innovation, and economic inefficiencies.

• Enhanced product variety and choice

• Lower prices for consumers

• Increased competition among businesses

How does a monopoly affect consumer choice?

• A monopoly encourages competition among different products.

• A monopoly reduces consumer choice by limiting options and increasing prices.

• A monopoly increases consumer choice by providing more options.

• A monopoly has no effect on consumer choice or prices.

A monopoly is very competitive

• True

• False

What are the 3 types of monopolies?

• resource monopolies, government-created monopolies, and natural monopolies

• school monopolies, government-created monopolies, and natural monopolies

• resource monopolies, government-created monopolies, and religious monopolies