Topic 4 Review: Market Structures

To operate a business in a 'national park', a business is granted a franchise by

• a national company
• a national government
• an entrepreneur
• a local government agence

Which of these factors causes a monopolistically competitive firm to have little control over the price of its product?

• the influence of government price supports
• the availability of substitutes
• the low marginal cost of production
• the weakness of the currency

Purely competitive markets are

• illegal
• rare
• restrictive
• common

Which of the following is an example of a natural monopoly?

• an auto manufacturer
• a subway system
• a supermarket chain
• a construction company

Which two markets have relatively high barriers to entry?

• monopoly & monopolistic competition
• oligopoly & monopoly
• monopolistic competition & oligopoly
• pure competition & monopolistic competition

Suppose a firm is looking to enter a market, but it quickly realizes that its employees do not have the technical skills needed for the firm to compete in that market. What do economists call the factor that is keeping this firm out of that market?

• compeition
• barrier to entry
• unique product
• single seller

•One seller •Complete barriers to market entry •No product differentiation. This list describes characteristics of which of the following market structures?

• Pure competition
• Monopolistic competition
• Oligopoly
• Monopoly

How does a natural monopoly function?

• A few firms are in perfect competition.
• The government supplies all buyers with the product.
• A single firm supplies all the output.
• Imperfect competition makes it difficult for firms to do business.

All of the following are characteristics of an oligopoly except—

• Few sellers
• High market entry barriers
• Total control over price
• Some product differentiation

All of the following are characteristics of pure competition EXCEPT —

• Large number of well informed buyers and sellers
• No buyers or sellers large enough to influence price
• More buyers or sellers easily enter the market
• Barriers to buyers and sellers entering the market