Perfect Competition and Monopoly

Firms in perfect competition has no market (a)  

What is a monopoly?

• A market structure with only one firm

• A market structure with many firms

• A market structure with no firms

• A market structure with a few firms

Which of the following is a characteristic of a monopoly?

• There are many firms in a market

• The firm is a price taker

• Firm has no control over the price

• Firm is a price maker

In a perfectly competitive market each firm is a price (a)   , meaning it has no control over the price of the product.

Which of the following is an example of monopoly?

• A street vendor selling hot dogs

• A super market selling groceries

• A company selling patented medicine

• A farmers market selling fruits and vegetables

Which of the following could attract new firm to join an industry?

• Normal profit

• Economic loss

• Economic profit

• Accounting profit

Which of the following is a potential benefit of perfect competition?

• Lower prices for consumers

• Innovation

• Limited choices for consumers

• Research and development

Perfect competition is a market structure characterised by a large number of (a)   and sellers, homogeneous products, free entry and exit, perfect information.

Identify the market structure.

Answer explanation

Monopoly, Downward sloping MC and MR.

Which market has barriers to entry?

• Perfect competition

• Monopoly

• Both

• None