chapter 6 smartbook and competition practice quiz

Which of the following best describes monopolistic competition?

A relatively large number of sellers producing similar products but each seller has brand loyalty.

Which of the following is NOT characteristic of a perfectly competitive market?

A significant degree of brand loyalty for each firm

Which of the following best describes perfect competition?

An industry involving a very large number of firms and none of those firms have market power.

Which of the following best summarizes why a firm in a perfectly competitive market will not increase its product price?

Asking a price higher than the market price would be futile because consumers could substitute with other perfectly identical products.

Which of the following is not a market structure or model?

Competitive monopoly

Which of the following are characteristics of the perfectly competitive market structure?

Low barriers to entry Identical products Zero economic profits in the long run

Which of the following are characteristics of the perfectly competitive market structure?

Many firms Identical products Low barriers to entry

Which of the following is an example of monopolistic competition?

Many firms supply similar products, each with some consumers who show significant brand loyalty.

Which of the following is an example of perfect competition?

Many small firms all produce the same good.

Which of the following is most likely to be characterized as a monopoly?

Microsoft

______ is characterized by many firms supplying essentially the same product, but each enjoys significant brand loyalty.

Monopolistic competition

Which of the following are considered market structures?

Oligopoly Monopoly Perfect competition Monopolistic competition

Which of the following is an example of a monopoly?

One large firm supplies all quantity to a specific market.

Which of the following is true concerning a monopoly?

The largest firm has significant market power.

Which of the following is characteristic of a perfectly competitive market?

There are low barriers to entry.

Which of the following is least likely to be characterized as a monopoly?

Your local coffee shop

Which of the following are characteristics of the perfectly competitive market structure?

Zero economic profits in the long run Horizontal firm demand curve Identical products

Which of the following is characteristic of perfectly competitive markets?

a large number of firms

An industry in which a few large firms supply most or all of a product is known as

an oligopoly.

If there are only four companies that produce tennis balls, the market could be considered

an oligopoly.

A firm operating in a perfectly competitive market is a price taker because it:

cannot change market price, it can only adjust to it

Within perfect competition, an individual firm ______ affect price by changing output. A market as a whole ______ affect price by changing market output.

cannot; can

Which of the following is the best example of a perfectly competitive market?

dairy farming

In perfect competition, a firm's demand will be ______ the product's price.

equal to

In an oligopoly there are _________ firm(s).

few

A perfectly competitive firm cannot charge a(n) ______ price than its competitors because consumers could substitute with other perfectly identical products.

higher

A perfectly competitive firm is a price taker because

it has no control over the market price of its product.

Which of the following is least likely to be an example of monopolistic competition?

lettuce farmers

When economists sort firms according to the number and relative size of firms in an industry, they are sorting according to

market structure

The number and relative size of firms in an industry defines the type of

market structure.

A firm that produces the entire market supply of a particular good or service is a(n)

monopolist

An industry in which many firms produce similar products, but each firm has significant brand loyalty, is known as

monopolistic competition.

A firm that produces the entire market supply of a particular good or service in the market structure is called a(n)

monopoly

Which of the following market structures has the highest barriers to entry?

monopoly

Which list has market structures in the correct order from the most to the least market power?

monopoly, oligopoly, monopolistic competition, perfect competition

Drag and drop the market structures to correspond to the correct level of competitiveness, with 1 being most competitive and 5 being least competitive.

most competitive- perfect competition 2- monopolistic competition 3- oligopoly 4- duopoly least competitive- monpoly

In a perfectly competitive market

no seller has market power.

In a(n) _____ a few large firms supply all or most of the market.

oligopoly

The market structures designated as "imperfect competition" are:

oligopoly and monopolistic competition

A firm that does not have the ability to alter the market price of the good it produces is part of the market structure called

perfect competition

In which of the following industries is the firm referred to as a price taker?

perfect competition

Which of the following market structures has the lowest barriers to entry?

perfect competition

A market in which no buyer or seller has market power is called

perfect competition.

Within perfect competition, an individual firm would not be able to affect ______ and is therefore known as a price-taker, yet a market as a whole can affect price by changing market output.

price

In a perfectly competitive catfish market, an increase in the price of catfish supplied by one firm will cause consumers of catfish to substitute for other firms' catfish. This situation exemplifies the economic concept of

price taking

All of the following describe perfectly competitive firms, except:

produce a large fraction of total supply

In a perfectly competitive industry, an increase in the price of firm A's product will cause consumers to

substitute products from the many other firms in the industry

A perfectly competitive firm is a price

taker

Firms within perfect competition are considered to be price

takers

Competitive firms cannot individually affect market price because

their individual production is insignificant relative to the production of the industry.

Drag and drop each market structure against the corresponding number of firms in its industry. Instructions

very large number- perfect competition large number- monopolistic competition few- oligopoly one- monopoly