Econ: Monopolistic Competition and Oligopoly

If the entire output of a market is produced by a SINGLE seller, the firm:

• Is a monopoly.

• Is producing a new product.

A barrier to entry is

• An obstacle that makes it difficult for new firms to enter a market.

• A commitment on the part of big business to allow smaller companies to compete.

• An obstacle that prevents additional workers from entering an industry, such as a union.

If there are many firms in an industry producing goods that are similar but slightly different, this is an example of

• Monopoly

• Monopolistic competition.

Product differentiation refers to

• Features that make one product appear different from competing products in the same market.

• The selling of identical products in different markets.

Which of the following usually results from colluding firms?

• Less is produced

• Profit decreases

• Prices are higher

The characteristic of oligopolistic firms that makes them different from all other types of firms is that oligopolistic firms:

• Advertise their products
• Consider each other's decisions
• Produce differentiated products
• Face high barriers to entry

Firms in monopolistic competition can leave the market easily in the long run.

• True
• False

An oligopoly is a market dominated by just a few firms.

• True
• False

How many firms are in a monopoly? 

• one
• two
• three
• unlimited

A market structure in which a few large firms dominate a market

• Perfect Competition
• Monopolistic Competition
• Oligopoly