Questions and Answers
Which best describes the availability of substitutes in a monopoly?
Wellness Pharmaceuticals has released a new antidepressant, Lexabuzac. Which type of monopoly does the company most likely have on this medication?
The market for which item generally involves pure competition?
Which best describes how the government enables government monopolies to exist?
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Who sets the price in a monopolistic competition?
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The lack of competition within a monopoly means that
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Why is competition limited in an oligopoly?
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Which is an example of a government monopoly in the United States?
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______________ is the term used to describe the amount of control or influence that consumers have on a market.
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Why is the automobile industry considered an oligopoly?
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When an oligopoly exists, how many producers dominate the market?
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____________ is the type of competition that occurs in a competitive market without identical producers.
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In pure competition, producers compete exclusively on the basis of
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Natural monopolies occur when one producer
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In the United States, which type of industry is often considered part of an oligopoly?
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Which best describes how the government sanctions technological monopolies?
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Study Notes
Market Structures Overview
- A monopoly is characterized by the absence of substitutes for the product offered.
- Technological monopolies arise when a company possesses unique advancements, exemplified by Wellness Pharmaceuticals and its antidepressant Lexabuzac.
Competition Types
- Pure competition typically occurs in markets dealing with homogeneous goods, such as corn.
- Monopolistic competition involves numerous producers who influence prices collaboratively.
Government and Monopolies
- Governments may create and operate monopolies, ensuring exclusivity in certain services, like the US Postal Service.
- Technological monopolies receive government support in the form of patents, granting the innovator exclusive rights to the technology.
Oligopoly Dynamics
- Oligopolies feature limited competition due to high market entry costs, which deter new entrants.
- The automobile industry exemplifies an oligopoly because of substantial barriers to entry, brand loyalty significance, and dominance by a few key players.
Market Control
- In monopolistic markets, monopolists have the power to set prices due to the lack of competition.
- A general term for consumer influence over market conditions is "sovereignty."
- In markets characterized by oligopoly, a few producers typically dominate.
Types of Competition
- Monopolistic competition exists among non-identical producers, allowing for product differentiation.
- In pure competition, producers compete solely based on selling identical goods.
Natural Monopolies
- Natural monopolies emerge when a single producer can satisfy the entire market demand efficiently, reducing redundancy in supply.
Oligopoly Examples
- Cell phone carriers in the United States are frequently cited as examples of industries operating under oligopoly conditions.
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Description
Test your understanding of market structures and competition with these flashcards. Each card presents key concepts related to monopolies, competition types, and market characteristics. Perfect for students looking to reinforce their knowledge in economics.
