WorksheetsEconomics Quiz on Market Structures
Total questions: 20
Worksheet time: 10mins
Which of the following would be classified as a differentiated product produced by a monopolistic competitor?
tap water
Channel No. 5
electricity
natural gas
In the competitive market for figure skate blades, manufacturers offer an array of products that are
distinctly similar in a particular way.
at opposite ends of the competition spectrum.
virtually identical on the competition spectrum.
distinctly different in a particular way.
A monopolistic competitor has the following information about cost and demand. If this industry was perfectly competitive, what price would the good sell for?
$15
$19
$21
$23
Product differentiation may occur in ____________ because ______________ created strong preferences for certain brands.
the minds of buyers; past habits and advertising
shaping intangible preferences; predatory pricing
imperfect competition; advertising and consumer habits
imperfect competition; the concept of differentiated products
_________________ occurs when circumstances have allowed several large firms to have all or most of the sales in an industry.
Collusion
A cartel
A monopoly
An oligopoly
As the name monopolistic competition implies, a firm’s decisions in this setting will in certain ways resemble ______________ and in other ways resemble ________________.
imperfect competition; oligopoly
imperfect competition; perfect competition
monopoly; perfect competition
monopoly; imperfect competition
Oligopoly firms acting individually may seek to gain profits _______________.
by having a mini-monopoly or through tough competition
by expanding levels of output and cutting prices
by having a mini-monopoly on a particular brand name
by selling products that are distinctive in some way
If the CEO of I'MaBigBank is playing prisoner's dilemma then, from his perspective, the gains to be had from cooperation are
larger than the payoffs that will be received.
smaller than the rewards from pursuing self-interest.
larger than the rewards from pursuing self-interest.
smaller than the payoffs that will be perceived.
The branch of mathematics that analyzes situations in which players must make decisions and then receive payoffs most often used by economists is
collusion theory
prisoner's dilemma
game theory
oligopoly collusion
Shopping malls typically lease retail space to a large number of clothing stores. When this group of retailers competes to sell similar but not identical products, they engage in what economists call _______________.
collusion
perfect competition
a cartel
monopolistic competition
Monopolistic competitors in the food industry will often include a recyclable symbol on packaging used for their product as a means to
be socially responsible.
be environmentally responsible.
differentiate their product.
be perceived more favorably.
A _______________ refers to a group of firms colluding with one another to produce at the monopoly output and sell at the monopoly price.
game theory
cartel
prisoner's dilemma
duopoly
Which of the following would most likely create the setting for an oligopoly?
market demand is two or more times more than quantity needed to produce at the minimum of the MC curve
market demand is two or more times less than quantity needed to produce at the minimum of the AC curve
insurmountable technological difficulty associated with producing similar products acts as an effective barrier to entry
government grants Alex, Trent, and Alyse each a patent for their respective molybdenum based electric car batteries
If a monopolistic competitor raises its price, it ___________ customers than a perfectly competitive firm, but ____________ customers compared to the number that a monopoly that raised its prices would.
will lose more; it will lose as many
will lose more; it will lose more
will lose fewer; it will lose more
will lose fewer; it will lose as many
In a monopolistic competitive industry, firms can try to differentiate their products by
enhancing the intangible aspects of the product.
creating optimal perceptions of the product.
choosing optimal locations from which the product is sold.
enhancing product’s physical aspects and all of the above.
____________ arises when firms act together to reduce output and keep prices high.
A cartel
A monopoly
Collusion
An oligopoly
The table shows the demand curve and cost information for a firm that is a monopoly. If they maximize their profits, what price will they charge
$400
$600
$20
$800
If oligopolistic firms banded together with the intention of acting like a monopoly, it would likely result in their being able to
charge a higher price in the short-run.
divide up the monopoly level of profit amongst themselves.
hold down output in the short-run.
both b and c above are correct.
The perceived demand curve for a group of competing oligopoly firms will appear kinked as a result of their commitment to
match price increases, but not price cuts.
stand at opposite ends of the competition spectrum.
match price cuts, but not price increases.
stand at the high point of the competition spectrum.
What role can advertising play with respect to differentiated products?
allows a firm to raise the prevailing market price
shapes consumers intangible preferences
allows a firm to sell any quantity it wishes
shapes perceived demand for a price taker
