Market Structures Quiz

List the four market structures in the order from least to most competitive.

• Monopoly, Oligopoly, Monopolistic Competition, Perfect Competition

• Perfect Competition, Monopolistic Competition, Oligopoly, Monopoly

• Oligopoly, Monopoly, Perfect Competition, Monopolistic Competition

• Monopolistic Competition, Perfect Competition, Monopoly, Oligopoly

When a major car company lowers its prices, other car makers will probably lower their prices.

• lower their prices

• increase their prices

• maintain their prices

• stop production

When a monopolistically competitive firm charges an excessive price for its product, consumers will substitute a rival's product.

• substitute a rival's product

• continue buying the same product

• stop purchasing altogether

• complain to the authorities

How many firms are there in an oligopoly?

• 2-3

• 4-5

• 6-10

• More than 10

In monopolistic competition, producers:

• have some ability to set prices

• are price takers like in perfect competition

• produce identical products

• operate in a market with no barriers to entry

The airline industry is an example of:

• Monopoly

• Oligopoly

• Perfect competition

• Monopolistic competition

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

• True

• False

What is an advantage of organizing a business as a corporation?

• Limited liability for owners

• Simpler tax structure

• Easier to form than a partnership

• Less regulatory oversight

A key disadvantage for a sole proprietorship is...

• Unlimited liability

• Complex tax structure

• Limited control

• Double taxation

What type of market structure has differentiated yet similar products and a very high level of competition?

• Perfect Competition

• Monopolistic Competition

• Oligopoly

• Monopoly