Market Structures: Interactive Quizzes for Economics Sixth Form

Question 1

In a perfectly competitive market, which of the following is a key characteristic?

Accepted Answer

Numerous buyers and sellers

Answer

High barriers to entry and exit

Answer

Differentiated products

Question 2

In a perfectly competitive market, firms are known as 'price takers'. What does this mean?

Accepted Answer

Firms must accept the market price set by supply and demand.

Answer

Firms can set their own prices independently.

Answer

Firms have some control over the market price.

Answer

Firms can charge higher prices due to a lack of competition.

Question 3

Which characteristic is unique to a perfectly competitive market?

Accepted Answer

Numerous buyers and sellers

Answer

High barriers to market entry and exit

Answer

Differentiated products

Answer

Price-setting power for individual firms

Question 4

Which attribute is NOT a characteristic of a perfectly competitive market?

Accepted Answer

Price Discrimination

Answer

Numerous Buyers and Sellers

Answer

Identical Products

Answer

Unrestricted Entry and Exit

Question 5

Which characteristic is NOT a feature of perfect competition?

Accepted Answer

Significant barriers to entry and exit

Answer

Numerous buyers and sellers

Answer

Minimal barriers to entry and exit

Answer

Standardized products with no differentiation

Question 6

Which characteristic is NOT a feature of perfect competition?

Accepted Answer

Differentiated products

Answer

Numerous buyers and sellers

Answer

Free entry and exit

Answer

Price takers

Question 7

In a perfectly competitive market, at the output level where a firm maximizes its profit, what is the relationship between marginal revenue and marginal cost?

Accepted Answer

Marginal revenue is equal to marginal cost

Answer

Marginal revenue is greater than marginal cost

Answer

Marginal cost is greater than marginal revenue

Answer

Marginal revenue is minimized

Question 8

In a perfectly competitive market, firms are:

Accepted Answer

Price takers

Answer

Producers of differentiated products

Answer

Protected by high barriers to entry

Answer

Engaged in non-price competition

Question 9

Which of the following is a characteristic of imperfect competition?

Accepted Answer

Firms can set prices independently

Answer

Numerous buyers and sellers

Answer

Standardized products

Answer

Unrestricted market entry and exit

Question 10

Which of the following is a characteristic of imperfect competition?

Accepted Answer

Firms have some control over the market price

Answer

A large number of buyers and sellers

Answer

Identical products

Answer

Firms can freely enter and exit the market

Question 11

Which characteristic is NOT associated with perfect competition?

Accepted Answer

Firms can set prices

Answer

Numerous buyers and sellers

Answer

Identical products

Answer

Easy to enter or leave the market

Question 12

In a perfectly competitive market, which of these factors is NOT present?

Accepted Answer

High barriers to entry and exit

Answer

Many buyers and sellers

Answer

Firms that accept the market price

Answer

Identical products

Question 13

Which characteristic is NOT a feature of perfect competition?

Accepted Answer

Price-setting ability

Answer

Numerous buyers and sellers

Answer

Standardized products

Answer

Free entry and exit

Question 14

Which of the following is incompatible with perfect competition?

Accepted Answer

Government-imposed price ceilings or floors

Answer

Numerous buyers and sellers

Answer

Complete market transparency

Question 15

Which of the following is a defining characteristic of a perfectly competitive market?

Accepted Answer

Numerous buyers and sellers

Answer

Differentiated products

Answer

Significant barriers to entry and exit

Answer

Firms possess market power

Question 16

In a monopoly, the firm is a:

Accepted Answer

Price-setter

Answer

Price-taker

Answer

Monopsonist

Answer

Oligopolist

Question 17

Which of the following is a potential consequence of high barriers to entry in an oligopolistic market?

Accepted Answer

Prices higher than in perfect competition

Answer

Intensified competition

Answer

Reduced market power

Answer

Lower profits for existing firms

Question 18

Define consumer surplus?

Accepted Answer

The difference between the price a consumer is willing to pay and the price they actually pay

Answer

The difference between the price a producer is willing to sell at and the price they actually sell at

Answer

The total value of goods and services consumed in a market

Answer

The profit made by firms in a market

Question 19

Which of the following is a potential benefit of price discrimination in a monopolistic market?

Accepted Answer

Higher profits for the monopolist

Answer

Increased consumer surplus

Answer

Reduced market power

Answer

Lower prices for consumers

Question 20

In a perfectly competitive market, the demand curve facing a firm is?

Accepted Answer

Horizontal

Answer

Vertical

Answer

Upward-sloping

Answer

Downward-sloping

Question 21

Precise and Clear: Which fundamental characteristic distinguishes perfect competition from other market structures?

Accepted Answer

A multitude of buyers and sellers

Answer

Differentiated products

Answer

High barriers to entry

Answer

Significant price-setting power

Question 22

Balanced and Relevant: In a monopoly market, the optimal output quantity typically differs from that in perfect competition. How does it compare?

Accepted Answer

Lower than in perfect competition

Answer

Higher than in perfect competition

Answer

Equal to that in perfect competition

Answer

Indeterminate

Question 23

Comprehensive and Challenging: Firms in an oligopoly market often exhibit distinct behaviors. Which of the following is not a common characteristic?

Accepted Answer

Independent decision-making

Answer

Price leadership

Answer

Non-price competition

Answer

Price collusion

Question 24

Objective and Precise: Which quantitative measure is specifically designed to assess market concentration?

Accepted Answer

Herfindahl-Hirschman Index

Answer

Lerner Index

Answer

Gini Coefficient

Answer

Lorenz Curve

Question 25

Revised for Accuracy: A perfectly elastic demand curve implies that:

Accepted Answer

Quantity demanded remains constant at any price

Answer

Quantity demanded increases as price increases

Answer

Quantity demanded decreases as price increases

Answer

Quantity demanded is zero at any positive price

Question 26

Improved Clarity: A subsidy provided on the supply side of a market will:

Accepted Answer

Decrease consumer surplus and increase producer surplus

Answer

Increase both consumer surplus and producer surplus

Answer

Increase consumer surplus and decrease producer surplus

Answer

Reduce both consumer surplus and producer surplus

Question 27

In an oligopolistic market, interdependence among firms arises primarily due to:

Accepted Answer

A few dominant firms

Answer

Identical products

Answer

High fixed costs

Answer

Significant barriers to entry

Question 28

A key government policy aimed at fostering competition is the implementation of:

Accepted Answer

Antitrust laws

Answer

Price controls

Answer

Subsidies to firms

Answer

Tariffs on imports

Question 29

The equilibrium price in a market is typically determined by:

Accepted Answer

The point of intersection between supply and demand curves

Answer

Government intervention

Answer

Firms' profit-maximizing price

Answer

Consumers' utility-maximizing price

Question 30

Consumer surplus can be defined as:

Accepted Answer

The difference between what consumers are willing to pay and what they actually pay

Answer

The difference between what firms are willing to accept and what they actually accept

Answer

The total revenue earned by firms

Answer

The total expenditure incurred by consumers

Question 31

Which market structure is characterized by a few large firms that dominate the market?

Accepted Answer

Oligopoly

Answer

Perfect competition

Answer

Monopoly

Answer

Monopolistic competition

Question 32

In a competitive market, the equilibrium price is determined by the:

Accepted Answer

Interaction of supply and demand

Answer

Government

Answer

Individual firms

Answer

Consumers' willingness to pay

Question 33

Which of the following is NOT a potential problem caused by market power?

Accepted Answer

Reduced innovation

Answer

Higher prices

Answer

Lower output

Answer

Limited consumer choice

Question 34

Consumer surplus is best defined as the:

Accepted Answer

Difference between the market price and the consumer's reservation price

Answer

Difference between the firm's marginal cost and the market price

Answer

Total revenue earned by producers

Answer

Total expenditure by consumers

Question 35

A price ceiling is a:

Accepted Answer

Maximum price set by the government

Answer

Minimum price set by the government

Answer

Price determined by the market

Answer

Price above the equilibrium price

Question 36

Which of the following is NOT a characteristic of perfect competition?

Accepted Answer

High barriers to entry

Answer

Numerous buyers and sellers

Answer

Identical products

Answer

Price takers

Question 37

Which market structure is characterized by a limited number of large firms with significant barriers to entry?

Accepted Answer

Oligopoly

Answer

Perfect competition

Answer

Monopoly

Answer

Monopolistic competition

Question 38

Which of the following measures the welfare loss due to market power?

Accepted Answer

Deadweight loss

Answer

Profit

Answer

Consumer expenditure

Answer

Market share

Question 39

Which of the following is NOT a barrier to entry in an oligopolistic market?

Accepted Answer

Low startup costs

Answer

Economies of scale

Answer

Patents

Answer

Government regulations

Question 40

Which market structure is characterized by a downward-sloping demand curve for each firm, no barriers to entry or exit, and identical products?

Accepted Answer

Perfect competition

Answer

Monopoly

Answer

Oligopoly

Answer

Monopolistic competition

Question 41

In a monopoly market, the firm faces a demand curve that is:

Accepted Answer

Downward sloping

Answer

Horizontal

Answer

Upward sloping

Answer

Perfectly elastic

Question 42

In a perfectly competitive market, the relationship between marginal revenue and demand is:

Accepted Answer

Equal to the demand curve

Answer

Downward sloping

Answer

Horizontal

Answer

Equal to the average revenue curve

Question 43

In a natural monopoly market, the government's primary goal is to:

Accepted Answer

Regulate prices to prevent abuse of market power

Answer

Break up the monopoly to promote competition

Answer

Provide subsidies to make the monopoly more efficient

Answer

Allow the monopoly to operate without interference

Question 44

Price discrimination refers to:

Accepted Answer

Charging different prices for the same product to different customers

Answer

Selling different products at different prices

Answer

Offering discounts for bulk purchases

Answer

Setting prices below marginal cost

Question 45

The Herfindahl-Hirschman Index (HHI) is used by antitrust authorities to:

Accepted Answer

Measure market concentration and potential anti-competitive behavior

Answer

Determine if a merger should be approved

Answer

Set the optimal price for a monopolist

Answer

Predict future market trends

Question 46

Which of the following is a defining characteristic of perfect competition?

Accepted Answer

Numerous buyers and sellers

Answer

Differentiated products

Answer

Barriers to entry

Answer

Price control

Question 47

If marginal revenue is less than average revenue in a market, the firm should:

Accepted Answer

Reduce its output

Answer

Increase its output

Answer

Maintain its current output

Answer

Exit the market

Question 48

Which of the following is NOT a tool for measuring market power?

Accepted Answer

Cournot Index

Answer

Herfindahl-Hirschman Index

Answer

Lerner Index

Answer

Bain Index

Question 49

In a monopoly market structure, the firm:

Accepted Answer

Has absolute market power

Answer

Has some but not complete market power

Answer

Has little market power

Answer

Has no market power

Question 50

In a perfectly competitive market, the equilibrium price is determined by:

Accepted Answer

The forces of supply and demand

Answer

Government intervention

Answer

Firms' pricing decisions

Answer

Consumer preferences

Question 51

Which feature is essential to a perfectly competitive market?

Accepted Answer

Numerous buyers and sellers

Answer

High barriers to entry

Answer

Unique products

Answer

Price discrimination

Question 52

Which market structure is characterised by a single dominant supplier with significant barriers to entry and, as a result, no close substitutes?

Accepted Answer

Monopoly

Answer

Perfect competition

Answer

Oligopoly

Answer

Monopolistic competition

Question 53

In a perfectly competitive market, how is the market price established?

Accepted Answer

By the interaction of supply and demand

Answer

By individual firms

Answer

By the government

Answer

Equal to marginal cost

Question 54

What is the primary objective for a profit-maximizing firm operating in a monopolistic competition market?

Accepted Answer

Producing at the quantity where marginal revenue equals marginal cost

Answer

Setting the highest price possible

Answer

Maximizing market share

Answer

Minimizing costs

Question 55

A demand curve that is horizontal represents which type of demand elasticity?

Accepted Answer

Perfectly elastic

Answer

Perfectly inelastic

Answer

Elastic

Answer

Inelastic

Question 56

What is the distinction between consumer surplus and producer surplus?

Accepted Answer

Consumer surplus: Price consumers pay minus minimum price they're willing to pay. Producer surplus: Price producers receive minus minimum price they'd accept.

Answer

Producer surplus: Price consumers pay minus minimum price they're willing to pay. Consumer surplus: Price producers receive minus minimum price they'd accept.

Answer

Consumer surplus and producer surplus are the same concept.

Answer

There is no difference between consumer surplus and producer surplus.

Question 57

Which characteristic is unique to markets that are NOT perfectly competitive?

Accepted Answer

Firms can set prices above market equilibrium

Answer

Numerous buyers and sellers

Answer

Standardized products

Answer

Firms can effortlessly enter or leave the market

Question 58

What defines a perfectly competitive market?

Accepted Answer

Identical products

Accepted Answer

Numerous buyers and sellers

Accepted Answer

Complete market knowledge

Answer

High barriers to entry and exit

Question 59

In a perfectly competitive market, the demand curve for an individual firm is:

Accepted Answer

Perfectly elastic

Answer

Downward sloping

Answer

Perfectly inelastic

Answer

U-shaped

Question 60

In a perfectly competitive market, firms are price takers. When demand falls, which action do they typically take to minimize losses?

Accepted Answer

Lower price and decrease output

Answer

Raise price and increase output

Answer

Lower price and increase output

Answer

Keep price and output the same

Question 61

Which characteristic is NOT associated with perfect competition?

Accepted Answer

Firms can independently determine prices

Answer

Numerous buyers and sellers

Answer

Identical products

Answer

No barriers to entry or exit

Question 62

In a perfectly competitive market, which of these factors DOES NOT apply?

Accepted Answer

Information is imperfect

Answer

Many buyers and sellers

Answer

Products are identical across firms

Answer

Firms can freely enter and exit the market

Question 63

In a perfectly competitive market, how does the quantity supplied by a single firm compare to its total output?

Accepted Answer

It is the same as its total output.

Answer

It is always more than its total output.

Answer

It is always less than its total output.

Answer

It is only the same as its total output if the firm is a monopoly.

Question 64

In a perfectly competitive market, what does it mean for firms to be price takers?

Accepted Answer

Firms must accept the market price as given.

Answer

Firms can set prices above the market price.

Answer

Firms can set prices below the market price.

Answer

Firms can influence the market price by changing their output.