Market Structures

Which of the following includes people who are directly or indirectly affected by actions of a corporation such as employees and the local community?

• Stakeholders

• Stockholders

• Shareholders

• Handholders

Competition is important because it:

• Limits the effects of supply and demand

• Eliminates profit margin

• Gives producers the incentive to be efficient

• Provides a market where producers control price

Assuming all types of markets experience equal production costs, which of the following market types will usually produce the most of a good, and at the lowest price?

• Perfectly competitive

• Monopolistically competitive

• Monopoly

• Oligopoly

When several firms sell differentiated products and act in relative ignorance of each others' actions, economists refer to the market structure as:

• monopolistic

• monopolistically competitive

• oligopolistic

• perfectly competitive

Which of the following best describes a successful monopoly?

• The only seller of a difficult-to-substitute product

• The only seller of a non-essential product

• The only buyer of a resource or type of labor

• The only buyer of a consumer product

An example of a company with a RESOURCE monopoly would be:

• Coke/Pepsi with soda

• Local water departments with water

• DeBeers with Diamonds

• All of these

All of the following can help break a monopoly EXCEPT:

• international competition

• increased barriers to entry

• changing consumer tastes

• technology and innovation

Firm X and Firm Y were previously in direct competition, but now they plan to merge. This combination would be considered a:

• conglomerate merger

• complementary merger

• vertical merger

• horizontal merger

When a group of firms agrees to keep the price in a market artificially high, the group is said to be practicing:

• predatory pricing

• cost-plus pricing

• collusive pricing

• discriminatory pricing

Which of the following is NOT a characteristic of perfect competition?

• Small number of producers and consumers

• Easy entry into the market

• Identical products

• No control over prices