Market Structures Vocab Quiz

Which market structure is characterized by a large number of small firms, identical products, and easy entry and exit?

• Monopoly

• Oligopoly

• Monopolistic Competition

• Perfect Competition

A commodity is:

• A type of financial instrument

• A basic good used in commerce

• A service provided by a company

• A digital currency

A barrier to entry is:

• A factor that makes it easy for new firms to enter a market

• A factor that makes it difficult for new firms to enter a market

• A factor that guarantees success for new firms in a market

• A factor that has no impact on new firms entering a market

A monopoly is a market structure characterized by:

• Multiple sellers and one buyer

• One seller and multiple buyers

• Multiple sellers and multiple buyers

• One seller and one buyer

Economies of scale refer to the cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.

• True

• False

A natural monopoly is a market structure where:

• There are many small firms competing.

• A single firm can supply the entire market at a lower cost than multiple firms.

• Government regulations prevent new firms from entering the market.

• Firms produce identical products.

A patent is:

• A type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of years.

• A document that provides evidence of ownership of a piece of land.

• A certificate that guarantees the quality of a product.

• A legal agreement between two parties to share profits.

A franchise is a business model where a company allows individuals to operate using its brand and system.

• A type of investment strategy

• A business model allowing individuals to operate using a company's brand

• A form of government

• A marketing technique

Monopolistic competition is a market structure characterized by:

• A single seller dominating the market

• Many firms selling differentiated products

• A few firms controlling the market

• Firms selling identical products

Nonprice competition refers to strategies used by companies to attract customers without changing the price of their products. Which of the following is an example of nonprice competition?

• Offering discounts

• Improving product quality

• Lowering prices

• Increasing production