Market Structures: Perfect Competition, Monopoly, Oligopoly, Monopolistic Competition

Question 1

Which characteristic is **NOT** present in a perfectly competitive market?

Accepted Answer

Price-setting ability for individual firms

Answer

Numerous buyers and sellers

Answer

Identical products

Answer

Absence of entry barriers

Question 2

In an oligopoly, firms are interdependent because their actions:

Accepted Answer

Directly influence each other

Answer

Have no impact on each other

Answer

Indirectly affect each other

Answer

Are always identical

Question 3

Monopolistic competition differs from perfect competition primarily in that:

Accepted Answer

Products are differentiated

Answer

Firms have limited market power

Answer

There are high barriers to entry

Answer

Prices are set by a central authority

Question 4

Price discrimination occurs when:

Accepted Answer

Different prices are charged for the same product based on customer attributes

Answer

Products are sold below cost to eliminate competition

Answer

Discounts are offered for bulk purchases

Answer

Free samples are given to attract potential customers

Question 5

Which market structure is characterized by a single dominant seller controlling a substantial market share?

Accepted Answer

Monopoly

Answer

Oligopoly

Answer

Monopolistic competition

Answer

Perfect competition

Question 6

A key characteristic of an oligopoly market is:

Accepted Answer

Dominance by a small number of large firms

Answer

Homogeneous products offered by firms

Answer

Minimal barriers to entry for new firms

Answer

Firms acting as price-takers

Question 7

Monopolistic competition exists when:

Accepted Answer

Numerous firms sell similar yet differentiated products

Answer

A single firm is the sole supplier in the market

Answer

Firms compete solely on the basis of price

Answer

Barriers to entry for new firms are insurmountable

Question 8

A common government policy aimed at fostering competition in markets is the implementation of:

Accepted Answer

Antitrust laws

Answer

Government subsidies for small businesses

Answer

Price controls imposed on firms

Answer

Tariffs on imported goods

Question 9

A natural monopoly arises when:

Accepted Answer

Economies of scale are exceptionally large

Answer

Barriers to entry for new firms are negligible

Answer

Firms can effectively differentiate their products

Answer

Market demand is perfectly elastic

Question 10

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

Accepted Answer

Freedom of entry and exit

Answer

Many buyers and sellers

Answer

Homogeneous products

Answer

Price takers

Question 11

In a perfectly competitive market, price is:

Accepted Answer

Determined by supply and demand forces

Answer

Controlled by the government

Answer

Set by the largest firm

Answer

Irrelevant

Question 12

Which market structure is typically associated with the highest prices?

Accepted Answer

Monopoly

Answer

Perfect competition

Answer

Oligopoly

Answer

Monopolistic competition

Question 13

Which market structure consists of a small number of dominant firms controlling a majority of the market share?

Accepted Answer

Oligopoly

Answer

Perfect competition

Answer

Monopoly

Answer

Monopolistic competition

Question 14

In perfect competition, how is the equilibrium price established?

Accepted Answer

Through interactions between supply and demand

Answer

By government intervention

Answer

By individual firms

Answer

By consumer preferences alone

Question 15

How might government price controls affect the actions of businesses in a monopoly market?

Accepted Answer

Reduced production and investment in the industry

Answer

Increased consumer satisfaction

Answer

No significant impact on business behavior

Question 16

Which market structure results in the most efficient allocation of resources?

Accepted Answer

Perfect Competition

Answer

Monopoly

Answer

Oligopoly

Answer

Monopolistic Competition

Question 17

How does a company's ability to influence market prices affect the overall market outcome?

Accepted Answer

A company with market power can significantly impact prices and other market results.

Answer

Market power is solely determined by a company's market share size.

Answer

Market power only exists in monopoly market structures.

Question 18

Which of the following characteristics is NOT applicable to perfect competition?

Accepted Answer

Barriers to entry

Answer

Homogeneous products

Answer

Price takers

Answer

Large number of buyers and sellers

Question 19

Which of the following best exemplifies an oligopoly market structure?

Accepted Answer

Automobile industry

Answer

Tutoring services

Answer

Farming

Answer

Hair salons

Question 20

In a monopolistically competitive market, firms:

Accepted Answer

Produce products that are differentiated from each other

Answer

Face high barriers to entry

Answer

Have substantial market dominance

Answer

Are price makers

Question 21

A key advantage of a perfectly competitive market is:

Accepted Answer

Efficient allocation of resources

Answer

Increased profits for firms

Answer

Guaranteed stability in prices

Answer

Protection of consumers from unfair pricing

Question 22

In a perfectly competitive market, a firm:

Accepted Answer

Cannot independently determine the market price

Answer

Can sustain above-average profits in the long run

Answer

Has the power to set prices above marginal cost

Answer

Faces a downward-sloping demand curve

Question 23

Which market structure typically exhibits the greatest product differentiation?

Accepted Answer

Monopolistic competition

Answer

Oligopoly

Answer

Perfect competition

Answer

Monopoly

Question 24

A potential negative consequence of government intervention in markets is:

Accepted Answer

Reduced economic efficiency

Answer

Enhanced market competition

Answer

Lower prices for consumers

Answer

Increased consumer protection

Question 25

Which of the following is a defining feature of a natural monopoly?

Accepted Answer

Declining average costs over a wide range of output

Answer

Numerous small-scale producers

Answer

Highly elastic demand for products

Answer

Low barriers to market entry

Question 26

Which market structure has many firms selling identical products, with no single firm having control over the price?

Accepted Answer

Perfect competition

Answer

Oligopoly

Answer

Monopoly

Answer

Monopolistic competition

Question 27

In which market structure do firms have the least ability to influence the price of their product?

Accepted Answer

Perfect competition

Answer

Monopolistic competition

Answer

Monopoly

Answer

Oligopoly

Question 28

A market dominated by a small number of large firms is known as a(n):

Accepted Answer

Oligopoly

Answer

Perfect competition

Answer

Monopolistic competition

Answer

Monopoly

Question 29

Which of these is NOT a feature of monopolistic competition?

Accepted Answer

Homogeneous products

Answer

Relatively easy entry and exit

Answer

Many buyers and sellers

Answer

Differentiated products

Question 30

A barrier to entry that gives an inventor exclusive rights to their invention is called a:

Accepted Answer

Patent

Answer

Copyright

Answer

Franchise

Answer

Trademark

Question 31

In the long run, firms in a perfectly competitive market typically earn:

Accepted Answer

Normal profits

Answer

Economic losses

Answer

Supernormal profits

Answer

Monopoly profits

Question 32

The idea that firms in an oligopoly must consider the actions of their rivals is called:

Accepted Answer

Interdependence

Answer

Collusion

Answer

Non-price competition

Answer

Price leadership

Question 33

A market with only one buyer is known as a:

Accepted Answer

Monopsony

Answer

Duopoly

Answer

Oligopsony

Answer

Monopoly

Question 34

Which of the following is NOT a potential benefit of competition in a market?

Accepted Answer

Higher prices for consumers

Answer

Increased innovation

Answer

Greater efficiency

Answer

Improved product quality

Question 35

Which of the following is NOT a characteristic of a perfectly competitive market?

Accepted Answer

Price-setting power

Answer

Many buyers and sellers

Answer

Identical products

Answer

Easy entry and exit

Question 36

In a monopoly market, which of the following is true?

Accepted Answer

There is only one seller.

Answer

Entry into the market is easy.

Answer

Prices are determined by supply and demand.

Answer

Products are differentiated.

Question 37

Which of the following industries is an example of an oligopoly?

Accepted Answer

Mobile phone industry

Answer

Farming

Answer

Retail stores

Answer

Haircuts

Question 38

Which of these is NOT a barrier to entry in a market?

Accepted Answer

Economies of scale

Answer

Government regulations

Answer

Cost advantages

Answer

Brand loyalty

Question 39

Which market structure features differentiated products and a few large sellers?

Accepted Answer

Monopolistic competition

Answer

Monopoly

Answer

Oligopoly

Answer

Perfect competition

Question 40

Which of these is an advantage of perfect competition?

Accepted Answer

Efficient allocation of resources

Answer

Price stability

Answer

High profits

Answer

Innovation

Question 41

Which of these is a disadvantage of monopoly?

Accepted Answer

Reduced consumer choice

Answer

Low prices

Answer

Increased efficiency

Answer

Increased innovation

Question 42

What government policy is used to promote competition and prevent monopolies?

Accepted Answer

Antitrust laws

Answer

Industrial policy

Answer

Fiscal policy

Answer

Monetary policy

Question 43

Which of these factors can lead to the formation of a cartel?

Accepted Answer

High barriers to entry

Answer

Government intervention

Answer

Technology advancements

Answer

Low demand

Question 44

Which of the following is NOT a type of non-price competition?

Accepted Answer

Price cutting

Answer

Product differentiation

Answer

Customer service

Answer

Advertising

Question 45

Which market structure is characterized by many firms selling identical products?

Accepted Answer

Perfect Competition

Answer

Monopolistic Competition

Answer

Monopoly

Answer

Oligopoly

Question 46

A market with a single seller of a unique product is called a:

Accepted Answer

Monopoly

Answer

Duopoly

Answer

Monopolistic Competition

Answer

Oligopoly

Question 47

In which market structure do firms have the LEAST power to set prices?

Accepted Answer

Perfect Competition

Answer

Monopoly

Answer

Oligopoly

Answer

Monopolistic Competition

Question 48

Which of the following is a barrier to entry in a monopoly?

Accepted Answer

Government regulations and patents

Answer

Low start-up costs

Answer

Many competing firms

Question 49

Firms in an oligopoly are likely to engage in:

Accepted Answer

Interdependent pricing strategies

Answer

Ignoring the actions of competitors

Answer

Price taking behavior

Answer

Perfect competition

Question 50

Which market structure is characterized by significant advertising and brand loyalty?

Accepted Answer

Monopolistic Competition

Answer

Perfect Competition

Answer

Monopoly

Question 51

A market with a few large firms dominating the industry is known as:

Accepted Answer

An oligopoly

Answer

Perfect competition

Answer

A monopoly

Answer

Monopolistic competition

Question 52

In perfect competition, products are:

Accepted Answer

Homogeneous (identical)

Answer

Differentiated

Answer

Unique

Answer

Highly specialized

Question 53

Which of the following is NOT a feature of monopolistic competition?

Accepted Answer

Barriers to entry

Answer

Product differentiation

Answer

Non-price competition

Answer

Many sellers

Question 54

A potential downside of a monopoly is:

Accepted Answer

Higher prices and less choice for consumers

Answer

More job creation due to market dominance

Answer

Lower prices due to economies of scale

Answer

Increased competition and innovation