Market Structures: Types and Characteristics | Economics Quiz

Question 1

The elasticity of demand measures the:

Accepted Answer

Percentage change in quantity demanded for a percentage change in price

Answer

Responsiveness of quantity demanded to price changes

Answer

Absolute change in quantity demanded for a given price change

Answer

Total quantity demanded at a given price

Question 2

In an inelastic demand market, a price increase will lead to:

Accepted Answer

Increased total revenue

Answer

Decreased total revenue

Answer

No change in total revenue

Answer

Increased quantity demanded

Question 3

Which of the following is NOT a goal of competition policy?

Accepted Answer

Increasing market power

Answer

Promoting efficiency

Answer

Protecting consumers

Answer

Encouraging innovation

Question 4

A firm's profit-maximizing output level occurs when:

Accepted Answer

Marginal revenue equals marginal cost

Answer

Average revenue equals average cost

Answer

Total revenue equals total cost

Answer

Price equals marginal cost

Question 5

Which characteristic is NOT found in a perfectly competitive market?

Accepted Answer

Firms have the ability to influence market prices

Answer

Numerous buyers and sellers

Answer

Identical products

Answer

No restrictions on entering or leaving the market

Question 6

When a market shifts from perfect competition to a monopoly, what are the anticipated effects on consumer surplus, producer surplus, and deadweight loss?

Accepted Answer

Consumer surplus falls, producer surplus rises, and deadweight loss rises.

Answer

Consumer surplus rises, producer surplus falls, and deadweight loss falls.

Answer

Consumer surplus rises, producer surplus rises, and deadweight loss rises.

Answer

Consumer surplus falls, producer surplus falls, and deadweight loss falls.

Question 7

Which market structure exhibits the most intense level of competition?

Accepted Answer

Perfect competition

Answer

Monopoly

Answer

Oligopoly

Answer

Monopolistic competition

Question 8

The primary obstacle to entry in a natural monopoly is:

Accepted Answer

Significant economies of scale

Answer

Government regulations

Answer

Strong brand loyalty

Answer

High advertising expenses

Question 9

Which element is not considered a potential cause of market failure?

Accepted Answer

Effective competition

Answer

Externalities

Answer

Public goods

Answer

Natural monopolies

Question 10

In a cartel, firms engage in:

Accepted Answer

Collaborative efforts to set prices and reduce competition

Answer

Intense competition for market share

Answer

Government regulation of industry practices

Answer

Limited influence on market outcomes

Question 11

Which example best illustrates a non-price barrier to entry?

Accepted Answer

Patents

Answer

Economies of scale

Answer

Brand recognition

Answer

High advertising costs

Question 12

The Herfindahl-Hirschman Index (HHI) is primarily used to measure:

Accepted Answer

Market concentration

Answer

Barriers to entry

Answer

Price elasticity

Answer

Market share

Question 13

In economics, the Herfindahl-Hirschman Index (HHI) measures market concentration. What does a high HHI value typically indicate?

Accepted Answer

Significant market power for companies

Answer

A fragmented market with many companies

Answer

Reduced market concentration

Question 14

In a monopoly market, how do its key features affect consumer options and producer actions?

Accepted Answer

Limited choices and higher prices

Answer

Wide variety and lower prices

Answer

Efficient production and more innovation

Answer

Fair competition and equal market share

Question 15

How does technological innovation contribute to the transformation of market structures?

Accepted Answer

It eliminates barriers to entry, leading to increased competition.

Accepted Answer

It creates new products and services, expanding market opportunities.

Accepted Answer

It increases consumer bargaining power, reducing market power of firms.

Answer

It reduces economies of scale, making smaller firms more competitive.

Question 16

Which of the following is NOT a feature of a monopoly market structure?

Accepted Answer

Low barriers to entry

Answer

Single seller

Answer

Price setter

Answer

High product differentiation

Question 17

In which market structure do firms offer identical products and have no control over price?

Accepted Answer

Perfect competition

Answer

Monopoly

Answer

Oligopoly

Answer

Monopolistic competition

Question 18

In an oligopoly market structure, firms are interdependent primarily because:

Accepted Answer

Their decisions influence the market price

Answer

They produce differentiated products

Answer

They have a large number of buyers

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They face high barriers to entry

Question 19

The Herfindahl-Hirschman Index (HHI) is used to measure:

Accepted Answer

Market concentration

Answer

Market share

Answer

Barriers to entry

Answer

Product differentiation

Question 20

Which of the following is NOT a factor that can result in market failure?

Accepted Answer

Perfect information

Answer

Externalities

Answer

Public goods

Answer

Monopolies

Question 21

Which of the following is an example of an antitrust policy?

Accepted Answer

Breaking up monopolies

Answer

Setting price ceilings

Answer

Providing subsidies to small businesses

Answer

Imposing tariffs on imports

Question 22

The socially optimal outcome in a market is achieved when:

Accepted Answer

Marginal social benefit equals marginal social cost

Answer

Price equals marginal cost

Answer

Total consumer surplus equals total producer surplus

Answer

Consumer demand equals supply

Question 23

In a market dominated by a monopoly, which government intervention strategy is most effective in promoting competition?

Accepted Answer

Antitrust legislation

Answer

Regulatory oversight

Answer

Financial incentives

Question 24

In a monopolistic competition market, firms possess:

Accepted Answer

Differentiated products and some market influence

Answer

Identical products and many buyers

Answer

Unique products and few buyers

Answer

Perfect substitutes and no product differentiation

Question 25

In a perfectly competitive market, firms are:

Accepted Answer

Price takers

Answer

Price makers

Answer

Profit maximizers

Answer

Loss minimizers

Question 26

寡占 is a market structure characterized by:

Accepted Answer

A few large firms

Answer

Numerous small firms

Answer

A single dominant firm

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No barriers to entry

Question 27

Which factor is likely to lead to a more concentrated market?

Accepted Answer

Mergers and acquisitions

Answer

Technological advancements

Answer

Government subsidies

Answer

Increased consumer demand

Question 28

In a monopsony, there is:

Accepted Answer

One dominant buyer

Answer

One dominant seller

Answer

Multiple buyers and few sellers

Answer

Few buyers and multiple sellers

Question 29

Which market structure is most likely to result in the highest level of economic efficiency?

Accepted Answer

Perfect competition

Answer

Monopoly

Answer

Oligopoly

Answer

Monopolistic competition

Question 30

Define market contestability. How does it influence business conduct and market effectiveness? Give real-world examples to support your explanation.

Accepted Answer

Market contestability refers to the ease with which new businesses can enter and compete in a market.

Answer

Market contestability only applies to perfectly competitive markets.

Answer

Market contestability has no impact on market efficiency.

Question 31

Which of the following is NOT a type of collusive behavior that reduces competition in a market?

Accepted Answer

Innovation sharing

Answer

Price fixing

Answer

Market sharing

Answer

Bid rigging

Question 32

Which of the following is NOT a legitimate objective of government intervention in market structures?

Accepted Answer

Guaranteeing profits for businesses

Answer

Correcting market failures

Answer

Promoting efficient resource allocation

Answer

Increasing consumer welfare

Question 33

How can a monopolist exploit consumers and harm economic efficiency?

Accepted Answer

Charging prices higher than marginal cost

Answer

Increasing output to meet market demand

Answer

Reducing prices to foster competition

Answer

Investing in research and development

Question 34

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

Accepted Answer

Large number of buyers and sellers

Answer

High barriers to entry

Answer

Differentiated products

Question 35

In a monopoly, the firm:

Accepted Answer

Has complete control over market price

Answer

Has no barriers to entry

Answer

Has perfect knowledge of consumer preferences

Answer

Faces elastic demand

Question 36

Which market structure is characterized by a few large firms that control the majority of market share?

Accepted Answer

Oligopoly

Answer

Monopolistic competition

Answer

Perfect competition

Answer

Monopoly

Question 37

Which of the following is NOT an advantage of perfect competition?

Accepted Answer

High profits for firms

Answer

Innovation and technological progress

Answer

Consumer choice

Answer

Efficient allocation of resources

Question 38

Which of the following is a disadvantage of a monopoly?

Accepted Answer

Reduced consumer choice

Answer

Lower prices

Answer

Increased innovation

Question 39

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

Accepted Answer

Perfectly elastic

Answer

Upward sloping

Answer

Horizontal

Answer

Downward sloping

Question 40

Which of the following is a government policy aimed at promoting competition?

Accepted Answer

Antitrust laws

Answer

Price controls

Answer

Tariffs

Answer

Subsidies

Question 41

Which market structure is characterized by innumerable buyers and sellers, identical products, and minimal barriers to entry and exit?

Accepted Answer

Perfect Competition

Answer

Monopoly

Answer

Oligopoly

Answer

Monopolistic Competition

Question 42

Which market structure features a few dominant firms that collectively control a sizable market share?

Accepted Answer

Oligopoly

Answer

Monopolistic Competition

Answer

Perfect Competition

Answer

Monopoly

Question 43

Monopolistic competition is a market structure characterized by:

Accepted Answer

Numerous sellers offering differentiated products

Answer

Sole seller and no close substitutes

Answer

Few sellers and identical products

Answer

Many sellers and standardized products

Question 44

In a perfectly competitive market, individual firms possess the characteristic of being:

Accepted Answer

Price takers

Answer

Price makers

Answer

Monopolists

Answer

Oligopolists

Question 45

Which market structure typically fosters the greatest degree of innovation and product development?

Accepted Answer

Monopolistic competition

Answer

Monopoly

Answer

Perfect competition

Answer

Oligopoly

Question 46

In a market characterized by economies of scale, one can anticipate that:

Accepted Answer

A small number of large firms will likely dominate

Answer

Product differentiation will be highly pronounced

Answer

Numerous small firms will fiercely compete

Answer

Barriers to entry will be minimal

Question 47

A defining characteristic of a contestable market is:

Accepted Answer

Low barriers to exit

Answer

High sunk costs

Answer

Limited number of sellers

Answer

Extensive product differentiation

Question 48

Which market structure is most likely to result in allocative inefficiency?

Accepted Answer

Monopoly

Answer

Oligopoly

Answer

Perfect competition

Answer

Monopolistic competition

Question 49

Which characteristic is NOT typically associated with a perfectly competitive market?

Accepted Answer

Significant barriers to entry

Answer

Numerous buyers and sellers

Answer

Homogeneous products

Answer

Price takers

Question 50

A market structure dominated by a single firm is termed:

Accepted Answer

Monopoly

Answer

Oligopoly

Answer

Monopolistic competition

Answer

Duopoly

Question 51

Which factor contributes to product differentiation within a market?

Accepted Answer

Branding

Answer

High barriers to entry

Answer

Perfect information

Answer

Government regulation

Question 52

A market structure where firms offer similar but distinct products is known as:

Accepted Answer

Monopolistic competition

Answer

Perfect competition

Answer

Oligopoly

Answer

Duopoly

Question 53

In a competitive market environment, firms typically experience:

Accepted Answer

Lower profit margins

Answer

More market power

Answer

Reduced product differentiation

Answer

Higher barriers to entry

Question 54

A defining characteristic of a duopoly market structure is:

Accepted Answer

Few dominant firms

Answer

Homogeneous products

Answer

Numerous small firms

Answer

Perfect information

Question 55

A potential negative consequence of a highly concentrated market structure is:

Accepted Answer

Reduced consumer welfare

Answer

Increased innovation

Answer

Lower prices

Answer

Enhanced economic growth