Topic 4 - Market Structures
Topic 4: Market Structures - Multiple Choice Exercise
Choose the correct answer for each question in the quiz
In perfect competition:
- A few firms dominate the industry.
- Firms are price makers.
- There are many buyers but few sellers.
- There are many buyers and sellers.
Firms in perfect competition face a:
- Perfectly elastic demand curve.
- Perfectly inelastic demand curve.
- Perfectly elastic supply curve.
- Perfectly inelastic supply curve
A perfectly competitive firm is a price taker. This means that
- The firm cannot individually influence the market price.
- The firm faces a perfectly elastic demand, or average revenue curve.
- The firm can only charge the same price as all other firms.
- All of the above.
In perfect competition:
- Short run supernormal profits are competed away by firms leaving the industry.
- Short run supernormal profits are competed away by firms entering the industry.
- Short run supernormal profits are competed away by the government.
- Short run supernormal profits are competed away by greater advertising.
Which of the following is not a condition for perfect competition to exist:
- There are a small number of firms in the industry.
- All firms are producing the same product.
- It is easy to either enter or exit the industry.
- All of the above apply.
A Monopoly Industry is one where
- There is only one producer.
- There are several producers.
- There are significant barriers to the entry of new firms.
- There is one producer and there are barriers to the entry of new firms.
In a monopoly, which of the following is not true?
- Products are differentiated.
- There is freedom of entry and exit into the industry in the long run.
- The firm is a price maker.
- There is one main seller.
In monopoly when supernormal profits are made:
- The price set is greater than the average cost.
- The price is less than the marginal cost.
- The average revenue equals the marginal cost.
- Revenue equals total cost.
Which market type below is regarded as least competitive in Mainstream Economics?
- Monopoly.
- Oligopoly.
- Monopolistic competition.
- Perfect competition.
In Perfect Competition in long run equilibrium:
- The firm is productively efficient.
- The firm is allocatively inefficient.
- The firm is both productively efficient and allocatively efficient.
- The firm is productively inefficient.
