Market Structures Review Practice

One of the requirements for a monopoly is that there is a unique product with no close substitutes.

• True

• False

The airline industry is an example of:

• Oligopoly

• Monopoly

• Perfect Competition

• Monopolistic Competition

In monopolistic competition, producers:

• have some ability to set prices

• are price takers

• produce identical products

• operate in a market with no barriers to entry

A market with a few large, profitable companies selling identical or similar products.

• Oligopoly

• Monopoly

• Perfect Competition

• Monopolistic Competition

How many firms are there in an oligopoly?

• Few

• One

• Many

• None

Why are there only a few firms in an Oligopoly?

• High Start-Up Costs

• Low Competition

• Government Regulations

• Limited Market Demand

In which market would you find the lowest prices charged and the greatest amount of innovation?

• Perfect competition

• Monopoly

• Oligopoly

• Monopolistic competition

When a monopolistically competitive firm charges an excessive price for its product:

• consumers will substitute a rival’s product.

• the firm will gain a larger market share.

• government regulations will decrease.

• demand for the product will increase.

What is monopolistic competition?

• Many companies selling similar but not identical products

• A market structure with a single seller

• A market with perfect competition

• A market with no competition

When a major car company lowers its prices, other car makers will probably:

• Lower their prices

• Raise their prices

• Keep their prices the same

• Increase production