Market Economics Chapter 7 Quiz

Perfect competition is characterized by all the following EXCEPT:

• A large number of buyers and sellers

• Identical products

• Sellers acting together to set prices

• Easy entry into the market

A monopoly that is based on the ownership or control of a manufacturing method, process or other scientific advance is a:

• Geographic Monopoly

• Pure Monopoly

• Government Monopoly

• Technological Monopoly

Under monopolistic competition:

• Products are similar but not identical

• Numerous restrictions prevent firms from entering the market

• No seller sells a product above the market price

• A single seller can affect price

When a manufacturer of pain medication reduced the price of the medication by 30%, profits declined by almost exactly 30%. Demand for the product is:

• Inelastic

• Elastic

• Unit elastic

• Complementary

When a customer’s need for a product is not urgent, demand tends to be:

• Inelastic

• Elastic

• Unit Elastic

• Complementary

Because a modest price increase has little or no effect, the demand for the product is:

• Complementary

• Inelastic

• Elastic

• Unit Elastic

A change in the behavior of buyers in response to a change in price is known as:

• Elasticity

• Demand

• Opportunity Cost

• Inelasticity

The retail clothing industry is an example of which market structure:

• Perfect Competition

• Monopolistic Competition

• Oligopoly

• Monopoly

The soft drink market is an example of which market structure:

• Perfect Competition

• Monopolistic Competition

• Oligopoly

• Monopoly

The shampoo market is an example of which market structure:

• Perfect Competition

• Monopolistic Competition

• Oligopoly

• Monopoly