Market Structure Quiz

1.
Which is NOT a characteristic of a a) Perfect competition

monopoly?
b) Monopolistic competition
A )Seller sets the market price c) Oligopoly
b) Entry into the market is easy d) Monopoly
c) Firm sells a unique product 6. A new firm recently arrived in Utopia
d) One seller offering much higher internet speeds than
existing providers. The other providers
2. Perfect competition involves: have gone out of business because so
many Utopian residents have switched to
a) Sellers working together to set prices the new provider. What will most likely
happen to the price of internet service in
b) A large number of buyers & sellers
Utopia?
c) Difficulty entering & exiting the market
d) Little information is available to buyers a) The price will decrease because the new
provider wants to keep its customers happy.
3. What were the three types of
b) The price will increase because there is
economies of scale mentioned in the
only one internet provider in Utopia.
YouTube video on economies of scale?
c) The price will decrease because there is
a) Oligopoly, Monopoly, & Perfect only internet provider in Utopia.
Competition d) There will be no change in price.
b) Land, Labor, & Capital
7. List the four market structures in order
c) Purchasing, Specialization, & Technical from least competitive to most
d) Specialization, Barriers to Entry, & competitive.
Technical
a) Oligopoly, Monopoly, Perfect Competition,
4.The market for milk is an example of Monopolistic Competition
perfect competition. Why?
b) Perfect Competition, Oligopoly,
Monopoly, Monopolistic Competition
a) Sellers offer a nearly identical product
c)Monopoly, Oligopoly, Monopolistic
b)Anyone can start a dairy farm or leave the
Competition, Perfect Competition
dairy business at any time
d) Monopoly, Monopolistic Competition,
c) Many people buy and sell milk
Perfect Competition, Oligopoly
d) All of the above
8. If a major car company such as Ford
5. The town of Utopia has three gas lowers their prices, what are other car
stations. The owners of these gas companies likely to do?
stations make decisions together about
when to raise and lower gas prices. It a) Raise their prices
would be difficult for another gas station
b) Go out of business
to enter this market. Which market
structure best describes the market for c) Maintain their current prices
gas in Utopia? d) Lower their prices
9. Which of the following statements is d) Monopolistic Competition
true?
13. Which of the following is NOT a
a) Monopolistic competitors have an Market Structure?
incentive to differentiate their products so
customers have choices, but monopolies do a) Perfect Competition
not have this incentive. b) Oligopoly
b) Monopolistic competitors & monopolies c) Monopoly
have the same amount of influence over the
d) Corporation
price of their products.
c) Both oligopolies & industries with
monopolistic competition involve a large 14. Which market structure involves
number of sellers. selling identical products?
d) All industries fit neatly into one type of
a) Perfect Competition
market structure.
b) Monopolistic Competition
10. Why does the government regulate
natural monopolies? c) Oligopoly
d) Monopoly
a) To increase competition in the market
b) To prevent the monopoly from charging
excessively high prices 15. Markets like automobiles, cell phones,
cable TV, and internet providers are
c) To ensure the monopoly provides an examples of which market structure?
adequate, high-quality amount of the product
d) All of the above are possible reasons for a) Monopoly
regulation b) Oligopoly
11. What are the advantages of c) Perfect competition
economies of scale?
d) Monopolistic competition
a) Costs less per unit to produce an item
b) Reduces barriers to entry in the market
and increases competition
c) Better quality products are produced
12. There are many sellers of blue
jeans. Each blue jean seller makes their
product slightly different to set it apart
from others. There is free entry and exit
into the blue jean market. Which market
structure does this describe?
a) Perfect Competition
b) Oligopoly
c) Monopoly

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Which is NOT a characteristic of a a) Perfect competition

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