Market Structures Quick Check

Monopolistically competitive markets and perfectly competitive markets share some similarities but differ in a number of ways. One such difference between the two is that monopolistically competitive firms _____.

feature differentiated products

The demand curve faced by firms in a perfectly competitive market is horizontal to reflect the fact that _____.

individual firms are unable to influence the market price

Which of the following is a barrier to entry that might be faced by a firm?

licensing requirements

In the market for strawberries, individual firms face no barriers to entry, sell a homogeneous product, and have no control over the market price. This market is best described as a _____.

perfectly competitive market

A health-care firm is looking to expand to international markets in an effort to increase profits. One potential location has only a few competing health-care providers, each holding a significant percentage of market share. Licensing requirements are high, but the firm may consider establishing a presence in the new location to enjoy _____.

the downward-sloping demand curves