Chapter 4

How many firms are there in a competitive market?

• 1

• Many

• 2-5

Why does no one firm dominate in a competitive market?

• No firm wants to

• Each firm sells to different people

• Each firm produces so little of the total supply that they cannot influence prices

• One firm will eventually dominate and make it a monopoly

Factors that make it difficult for new firms to enter a market are called

• Barriers to entry

• Factors of production

• Limited supply

• Monopolistic Outlook

Which of the following industries is an example of a monopoly?

• utilities/water

• department stores

• auto industry

• commercial airlines

Which is NOT a characteristic of a monopoly?

• Seller sets the market price

• Firm sells a unique product

• Entry into the market is easy

• One seller

Public utilities are an example of

• Perfect Competition

• Natural Monopoly

• Monopolistic Competition

• Oligopoly

In monopolistic competition there are many buyers and sellers

• True

• False

Non-price competition is the use of ads, giveaways, or promotions to win customers

• True

• False

List the four market structures in order from LEAST competitive to MOST competitive.

• Oligopoly, Monopoly, Perfect Competition, Monopolistic Competition

• Perfect Competition, Oligopoly, Monopoly, Monopolistic Competition

• Monopoly, Oligopoly, Monopolistic Competition, Perfect Competition

• Monopoly, Monopolistic Competition, Perfect Competition, Oligopoly

Which law bans monopolies?

• Tea Act

• Anti-Trust Act

• Townsend Act

• Monopoly Act