Econ_Weekly Quizizz, Pure Competition & Monopolies

Which of the following is a key characteristic of a purely competitive market?

• Few sellers, differentiated products

• Many sellers, identical products

• One seller, unique product

• Few buyers, standardized products

A firm in a purely competitive market maximizes profit by producing where:

• Marginal cost exceeds marginal revenue

• Marginal revenue equals marginal cost

• Average total cost is minimized

• Total revenue is maximized

In the long run, if firms in a purely competitive market are earning economic profits, what will occur?

• Firms will exit the market.

• New firms will enter the market.

• The market price will increase.

• Firms will differentiate their products.

Which of the following best describes the ease of entry and exit in a purely competitive market?

• High barriers to entry and exit

• Moderate barriers to entry and exit

• No significant barriers to entry or exit

• Government-regulated entry and exit

Pure competition leads to allocative efficiency because:

• Firms can charge high prices.

• Price equals marginal cost.

• Firms can differentiate their products.

• There are few sellers in the market.

Which of these markets most closely resembles pure competition?

• The market for automobiles

• The market for breakfast cereals

• The market for agricultural commodities like corn

• The market for software operating systems

A monopoly is characterized by:

• Many sellers, identical products.

• A single seller, unique product.

• Few sellers, differentiated products.

• Many buyers, standardized products.

Compared to a purely competitive market, a monopoly typically results in:

• Lower prices and higher output.

• Higher prices and lower output.

• Equal prices and output.

• Lower prices and lower output.

A "natural monopoly" occurs when:

• The government grants exclusive rights to a firm.

• • Economies of scale are so large that a single firm can produce at a lower cost than multiple firms.

     

• Firms engage in predatory pricing.

• There are many sellers in the market.

Price discrimination occurs when a firm:

• Charges the same price to all customers.

• Charges different prices to different customers for the same product.

• Sells products at a loss.

• Engages in competitive pricing.