Understanding Market Structures Quiz

Which of the following is a characteristic of perfect competition?

• High barriers to entry

• Homogeneous products

• Price maker

• Few sellers

In which market structure is a firm most likely to be a price taker?

• Monopoly

• Monopolistic competition

• Perfect competition

Which of the following is true about the long-run equilibrium in monopolistic competition?

• Firms earn supernormal profits

• Firms earn normal profits

• Firms incur losses

• Firms earn zero economic profit

What type of efficiency is achieved in the long run under perfect competition?

• Allocative efficiency only

• Productive efficiency only

• Both allocative and productive efficiency

• Neither allocative nor productive efficiency

Which market structure is characterised by significant barriers to entry?

• Perfect competition

• Monopolistic competition

• Monopoly

In the short run, a monopolist can earn:

• Only normal profits

• Only supernormal profits

• Supernormal, normal profits, or losses

• Only losses

Which of the following is a feature of monopolistic competition?

• Homogeneous products

• Few sellers

• Product differentiation

• High barriers to entry

Which of the following best describes the level of profit in the long run for a perfectly competitive firm?

• Supernormal profits

• Normal profits

• Losses

• Zero economic profit

Which market structure is most likely to achieve dynamic efficiency?

• Perfect competition

• Monopolistic competition

• Monopoly

Which of the following is true about the short-run equilibrium in perfect competition?

• Firms can only earn normal profits

• Firms can earn supernormal profits, normal profits, or incur losses

• Firms can only incur losses

• Firms can only earn supernormal profits