Market Structures and Competition

The market for which item generally involves pure competition? a. cola b. corn c. jeans d. ice cream

b. corn

In an oligopolistic market, consumer choice is a. nonexistent. b. limited. c. extensive. d. infinite.

b. limited.

Which helps enable an oligopoly to form within a market? a. Costs of starting a competing business are too high. b. The government restricts market entry. c. The number of options in a market confuses consumers. d. No competition exists between producers.

a. Costs of starting a competing business are too high.

Why is competition limited in an oligopoly? a. High entry costs prevent new producers from entering the market. b. Producers completely refuse to engage in price wars. c. No major distinctions exist between producers. d. Producers actively segment the market to avoid competition.

a. High entry costs prevent new producers from entering the market.

______ is the term used to describe the amount of control or influence that consumers have on a market. a. Sovereignty b. Competition c. Oligopoly

a. Sovereignty

Natural monopolies occur when one producer a. can meet the market's entire demand. b. controls the method of production. c. is the only one authorized to produce a given product. d. creates unique products.

a. can meet the market's entire demand.

In pure competition, producers compete exclusively on the basis of a. selling identical items. b. advertising heavily to promote their good. c. producing the unique features of their good. d. focusing on maintaining a positive image.

a. selling identical items.

Why is the automobile industry considered an oligopoly? a. It offers little differentiation within the market. b. It has significant barriers to entry. c. It is controlled by companies that patent key technology. d. It relies on price variation to attract customers. e. It depends on brand loyalty and image to generate sales. f. It is dominated by a few key players.

b. It has significant barriers to entry. e. It depends on brand loyalty and image to generate sales. f. It is dominated by a few key players.

In the United States, which type of industry is often considered part of an oligopoly? a. electric companies b. cell phone carriers c. mail delivery services d. denim companies

b. cell phone carriers

Wellness Pharmaceuticals has released a new antidepressant, Lexabuzac. Which type of monopoly does the company most likely have on this medication? a. natural monopoly b. de facto monopoly c. government monopoly d. technological monopoly

d. technological monopoly