Worksheetscompetition, monopoly and oligopoly
Total questions: 10
Worksheet time: 10mins
Which of the following is a barrier to entry?
Brand loyalty
Lack of advertising
Low set-up costs
Free information flow
Which of the following is a feature of a competitive market?
Easy entry and exit
Firms with a high market share
Small number of buyers
Small number of sellers
Which of the following is a possible disadvantage of oligopoly?
Lower prices
Collusion
More choice
More innovation
Which of the following industries is likely to be oligopolistic?
Chicken farming
Petrol
Restaurant
Flower selling
Which exists in highly competitive market but not in monopoly?
Barriers to entry
Economies of scale
Many sellers
Higher price
Prices tend to be lower in a competitive industry than in a monopoly. Why is this?
Profits are lower in a monopoly
A monopoly is a price taker
Competitive industry has more economies of scale
New firms are free to enter the industry
What is a possible advantage to the consumer of in a monopoly market?
Its average production costs will be lower than if there were many suppliers
Its profits will be higher than if there were many suppliers
It is able to restrict competition
It can determine the market price
What is not likely to be true about the monopoly compared with a competitive firm?
A monopoly will earn a higher rate of profit
A monopoly will gain a greater share of the market
A monopoly will offer a wider choice to the consumer
A monopoly will operate on a larger scale of production
Machu Picchu is Peru's most popular tourist destination. One train company, PeruRail, operates a monopoly service up to the site. Why might competition on the route increase the fares paid by passengers?
Competitive firms have more influence on price than a monopoly
Competitive firms never make a loss
Less advantage may be taken of economies of scale
More profit may be available to spend on new technology to reduce costs of production
Why might a government encourage a monopoly?
It can have high average costs
It can compete against foreign firms
It can prevent innovation
It can make excessive profits
