Economics Chapter 7.3: Market Structures

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What is the main characteristic of a monopolistically competitive market?

A few large firms with standardized products

Many sellers and buyers with differentiated products (correct)

Few sellers and many buyers

A single seller with complete control over the market

What is a characteristic of an oligopolistic market?

A single seller with complete control over the market

Many sellers and buyers with differentiated products

Few sellers and many buyers with standardized products (correct)

Many buyers and sellers with perfect information

What is an example of collusion in the airline industry?

Airlines advertising to attract more customers

Airlines secretly agreeing to keep prices high (correct)

Airlines competing to offer the lowest prices

Airlines merging to reduce competition

What is a result of collusion in the airline industry?

A rise in the price of flight tickets Signup and view all the answers

What is a characteristic of a perfectly competitive market?

Many buyers and sellers with perfect information Signup and view all the answers

What is an advantage of economies of scale?

Reduced production costs for firms Signup and view all the answers

What is a characteristic of a monopolist?

A single seller with complete control over the market Signup and view all the answers

What is a characteristic of a price taker?

A firm with no influence on the market price Signup and view all the answers

What is a characteristic of perfect competition in which producers can enter or exit the market freely?

Freedom to enter and exit markets Signup and view all the answers

What type of competition occurs in markets with few sellers or products that are not alike?

Imperfect competition Signup and view all the answers

Which of the following is an example of a standardised product in a perfect competition market?

Notebook paper Signup and view all the answers

What is a characteristic of perfect competition in which buyers and sellers are well-informed about the market price?

Well-informed buyers and sellers Signup and view all the answers

What is a feature of imperfect competition in which sellers have more control over the price?

Sellers have more control over the price Signup and view all the answers

Which of the following is a characteristic of a price taker in a perfect competition market?

Sellers accept the market price set by supply and demand Signup and view all the answers

What is a characteristic of imperfect competition in which it is hard to enter the market due to existing dominance?

Hard to enter the market due to existing dominance Signup and view all the answers

What is an example of a market that exhibits perfect competition?

Agricultural products Signup and view all the answers

Which characteristic is specific to a monopoly?

One seller in the market Signup and view all the answers

What is a natural monopoly?

A monopoly where production is cheapest with one producer Signup and view all the answers

What happens when marginal revenue equals marginal cost in a monopoly?

Maximum profit is achieved Signup and view all the answers

Which type of monopoly is based on government ownership or permission?

Government monopoly Signup and view all the answers

What are trade barriers?

Barriers set by a nation to limit free trade Signup and view all the answers

What is a price taker?

A firm that accepts the market price Signup and view all the answers

What does it mean if a product is standardized?

Identical across different producers Signup and view all the answers

What are economies of scale?

Savings in costs gained by increased level of production Signup and view all the answers