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%