Market Structures and Firm Behavior Quiz

What is a characteristic of perfect competition?

• High barriers to entry

• Few large firms

• Price makers

• Homogeneous products

In monopolistic competition, firms have some control over pricing due to:

• Identical products

• High barriers to entry

• Product differentiation

• Limited market power

Which market structure is characterized by a single seller?

• Oligopoly

• Monopoly

• Monopolistic competition

• Perfect competition

What is a key feature of oligopoly?

• Interdependence among firms

• Many small firms

• Free entry and exit

• Price takers

In a monopoly, the firm is considered a:

• Market challenger

• Price taker

• Market follower

• Price maker

Which of the following is an example of monopolistic competition?

• Airlines

• Utilities

• Agricultural markets

• Restaurants

What is a disadvantage of a sole proprietorship?

• Unlimited liability

• Shared profits

• Limited liability

• Perpetual existence

In a partnership, what is a potential disadvantage?

• Limited capital

• Unlimited liability

• Easy to form

• Shared expertise

What is a characteristic of a corporation?

• Simple to establish

• Unlimited liability

• Limited liability

• Owned by one person

Which type of business organization is owned and operated by a group for mutual benefit?

• Sole proprietorship

• Partnership

• Cooperative

• Franchise