Market Structures
Which of the following is a characteristic of a monopolistic market?
There are high barriers to entry
A monopoly can only be sustained in the long run if
There are significant barriers to entry
A cartel is
a group of oligopolists who have colluded together to restrict output and raise price
Monopolistic competition is similar to perfect competition because both marker structures have
a large number of firms
A key difference between monopolistic competition and oligopoly is that firms in monopolistic competition
can easily enter and exit the industry
A natural monopoly is created when the firm
can produce at a lower average total cost than two competing firms
A price taking firm
cannot affect the market price of its product
If oligopolists produce identical products and there is no advertising, they can compete by
either changing in price or by changing output
If a monopolistically competitive firm loses money in the long run, it will
exit the industry, causing each remaining firm's individual demand curve to increase
A monopolist is considered a price maker because
he is able to affect price by changing output
Monopolies are generally regarded as harmful to the economy because
part of the consumer surplus is converted into a deadweight loss
Branding is an important phenomenon for consumers because it
provides info and quality assurance
If the government decides a monopoly is necessary, it can
regulate the price that a monopolist can change
Monopolistic competition is similar to monopoly because both market structures have
some power to set their own prices
Which of the following markets most closely resembles perfect competition?
Agriculture
A legal monopoly may be created
By issuing patents or copyrights
Which of the following markets most closely resembles monopoly?
Diamonds
Which of the following markets most closely resembles monopolistic competition?
Fast food restaurants
Sum of al individual supply curves in a market is the
Industry Supply Curve
If a perfectly competitive firm is making an abnormal profit in the short run, it is certain that
New firms will enter the market until no firms make an abnormal profit
Characteristic of a perfectly competitive market
Numerous Sellers
The demand curve faced by an individual firm under perfect competition is
Perfectly elastic
Firms in monopolistic competition spend a lo on advertising because it
is a good way to differentiate their products in the eyes of consumerrs
Firms can differentiate their products by
location
It can be difficult for an industry to maintain tactic collusion if
there are a lot of smaller firms to keep track of
Which of the following is a characteristic of an oligopolist market?
there are only a few firms with a concentration ratio usually above 50%