18 Questions
What is a key characteristic of a firm in a monopolistic competitive market?
It is eager to sell more at the going market price.
What is the primary difference between a monopolistically competitive market and a perfectly competitive market?
The level of product differentiation.
What is an example of a non-price competition strategy in a monopolistically competitive market?
Advertising.
What is a characteristic of an oligopolistic market?
A few firms producing a differentiated product.
What is collusion in the context of oligopolistic markets?
An informal agreement between firms to avoid competition.
What is a cartel in the context of oligopolistic markets?
A formal agreement between firms to set prices.
What is a market structure characterized by a single seller of a particular product?
Monopoly
What type of monopoly occurs when one company controls manufacturing methods or has rights/patents to exclusively produce a product?
Technological Monopoly
What is a market structure characterized by a few large firms competing with each other?
Oligopoly
What is a business strategy in which firms try to differentiate their products from those of their competitors?
Product Differentiation
What is an agreement among firms to restrict competition and increase prices?
Collusion
What is a law that regulates business practices and prohibits anti-competitive behavior?
Sherman Act
What is a characteristic of monopolistic competition?
Products are slightly different
What is non-price competition often used for in monopolistic competition?
To differentiate products
Which of the following is an example of an industry exhibiting monopolistic competition?
Fast food
What is a key difference between oligopoly and monopolistic competition?
The number of firms
What is the outcome of firms in monopolistic competition in terms of profits?
Normal profits
What is a common strategy used by firms in oligopoly to maintain their market share?
Collusion and cartels
Test your understanding of different market structures, including monopolistic competition, oligopoly, and perfect competition. Identify the characteristics of each type and how they impact the market.
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