Market Structure

Which market structure is characterized by many small firms selling identical products with no pricing power?

• Monopoly

• Monopolistic competition

• Perfect competition

• Oligopoly

What is a key characteristic of an oligopoly?

• Many small firms competing aggressively

• A few large firms with significant market power

• A single firm dominates the market

• Firms selling identical products with no differentiation

Which of the following is a potential barrier to entry in a market?

• High consumer price sensitivity

• A low concentration ratio

• Many small firms competing

• High startup costs

In which market structure are firms most likely to engage in non-price competition?

• Monopoly

• Monopolistic competition

• Perfect competition

• None of those

Why might firms in an oligopoly engage in tacit collusion?

• To lower consumer prices

• To increase competition

• To maximize collective profits without formal agreements

• To eliminate all rivals

What is it called when a dominant firm lowers its prices below cost to drive competitors out of business?

• Economies of scale

• Cost leadership

• Predatory pricing

• Market segmentation

What type of competition do firms in monopolistic competition primarily engage in?

• Price competition

• Monopoly power

• Mergers and acquisitions

• Non-price competition (e.g., branding, advertising)

Which strategy is NOT commonly used by firms in an oligopoly?

• Price fixing

• Advertising wars

• Setting prices equal to marginal cost

• Cutting prices aggressively to drive out competitors