Types of Markets in Economics

Which of the following is NOT a type of market in the free-market economic system?

• Perfect competition

• Monopoly

• Oligopoly

• Monopsony

Perfect competition requires all of the following conditions EXCEPT:

• Many buyers and sellers

• Differentiated products

• Full information about prices and quality

• Freedom to enter and exit the market

Which of the following is an example of a perfectly competitive market? (Select all that apply)

• Eggs

• Italian Market in South Philly

• Restaurants

• Shoe stores

Monopolistic competition includes:

• Multiple sellers producing identical products

• Multiple sellers producing differentiated products

• One seller producing identical products

• One seller producing differentiated products

What is/are the primary (legal) method(s) for firms in an oligopoly to boost sales?

• Product differentiation

• Collusion

• Price leadership

• Advertising

Which of the following is an example of a legal monopoly? (Select all that apply)

• Water suppliers

• Cable TV providers

• Copyright holders

• Patent holders

What is the purpose of collusion in an industry?

• To increase competition

• To lower prices for consumers

• To limit competition and set prices

• To encourage innovation

Which industry is an example of an oligopoly? (Select all that apply)

• Breakfast cereals

• Clothing

• Wireless carriers

• Airlines

• Restaurants

What is the concentration ratio needed for an absolute oligopoly with 4 (or fewer) firms controlling most of the market?

What is the main reason for restricting monopoly power?

• To increase prices for consumers

• To promote fair competition

• To encourage innovation

• To maximize profits for monopolies