Market Structure Flashcards
(27 cards)
What is perfect competition?
A market structure where many firms offer a homogeneous product and no single firm can influence the market price.
Which of the following is a characteristic of perfect competition? A) Price makers B) Homogeneous products C) Barriers to entry
B) Homogeneous products
True or False: In perfect competition, firms can set their own prices.
False
What is monopolistic competition?
A market structure where many firms sell products that are similar but not identical.
Fill in the blank: In monopolistic competition, firms compete on price, quality, and ______.
branding
Which market structure has the least control over pricing?
Perfect competition
True or False: Monopolistic competition has high barriers to entry.
False
What is oligopoly?
A market structure characterized by a small number of firms that dominate the market.
In an oligopoly, firms are often interdependent. What does this mean?
The actions of one firm can significantly affect the actions of other firms.
Multiple choice: Which of the following is a feature of oligopoly? A) Many sellers B) Homogeneous products C) Few dominant firms
C) Few dominant firms
What is a monopoly?
A market structure where a single seller controls the entire market for a product or service.
Fill in the blank: In a monopoly, there are ______ barriers to entry for other firms.
high
True or False: A monopoly is a price taker.
False
What is one advantage of perfect competition for consumers?
Lower prices due to high competition among firms.
Which market structure is characterized by product differentiation?
Monopolistic competition
True or False: Oligopolistic firms may engage in collusion to set prices.
True
What is the primary disadvantage of a monopoly?
Higher prices and reduced consumer choice.
Fill in the blank: In monopolistic competition, firms have some control over ______.
pricing
What does the term ‘price maker’ refer to?
A firm that can set its own prices due to lack of competition.
Which market structure often leads to non-price competition?
Monopolistic competition
True or False: In oligopolies, products can be either homogeneous or differentiated.
True
What is one reason for the existence of monopolies?
Control of a unique resource or technology.
What is the primary goal of firms in perfect competition?
To maximize profits.
Which of the following market structures has the highest barriers to entry? A) Perfect competition B) Monopolistic competition C) Monopoly
C) Monopoly
