Perfect Competition and Monopoly

Firms in perfect competition has no market _____

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 _______, 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 _______ 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