Quiz on Market Structures in Managerial Economics

What is the main characteristic of monopolistic competition?

• Perfect substitutes for consumers

• High barriers to entry

• Many firms offer similar but not identical products

• A single firm controls the market

Which of the following is NOT a characteristic of monopoly?

• Perfect competition

• Many buyers

• High barriers to entry

• Single seller

In which market structure do firms have significant influence over prices?

• Perfect competition

• Monopolistic competition

• Monopoly

• Oligopoly

What is a key feature of oligopoly?

• Many firms with no influence on each other

• Identical products only

• Few firms with interdependent pricing

• A single firm with complete market control

Which market structure is characterized by low barriers to entry and exit?

• Monopoly

• Oligopoly

• Perfect competition

• Monopolistic competition

What is the profit-maximizing rule for firms in monopolistic competition?

• Total revenue equals total cost

• Average cost equals marginal cost

• Price equals marginal cost

• Marginal revenue equals marginal cost

Which of the following is an example of a monopolistic competition?

• Telecommunication companies

• Oil companies

• Fast food restaurants

• Electricity provider

What happens to economic profit in the long run for firms in monopolistic competition?

• It becomes negative

• It approaches zero

• It increases indefinitely

• It remains constant

What is a common form of government intervention in monopolistic markets?

• Tax incentives

• Anti-trust laws

• Price controls

• Subsidies

In an oligopoly, what is the term for firms working together to set prices?

• Market segmentation

• Monopolistic behavior

• Collusion

• Price leadership