1. The general term for market structures that fall somewhere between monopoly and perfect competition is
1. The general term for market structures that fall somewhere between monopoly and perfect competition is
a. incomplete markets.
b. monopolistically competitive markets.
c. imperfectly competitive markets.
d. oligopoly markets.
2. An oligopoly is a market in which
a. there are many price-taking firms, each offering a product similar or identical to the products offered by other firms in the market.
b. there are only a few sellers, each offering a product similar or identical to the products offered by other firms in the market.
c. the actions of one seller in the market have no impact on the other sellers' profits.
d. firms are price takers.
3. A monopolistically competitive industry is characterized by
a. a few firms selling highly different products.
b. a few firms selling products that are similar but not identical.
c. many firms selling identical products.
d. many firms selling products that are similar but not identical.
4. Free entry and exit means that the number of firms in the market adjusts until
a. producers continuously enter the market freely.
b. the market grows to a profitable level.
c. economic profits are driven to zero.
d. products are free.
5. In which of the following market structures is(are) there a large number of sellers?
(i) monopolistic competition
(ii) perfect competition
(iii) oligopoly
a. (ii) and (iii) only
b. (i) and (ii) only
c. (i), (ii), and (iii)
d. (ii) only
6. For a monopolistically competitive firm, at the profit-maximizing quantity of output,
a. price equals marginal revenue.
b. marginal revenue exceeds marginal cost.
c. marginal cost exceeds average revenue.
d. price exceeds marginal cost.
Homework Answers
1. Option C
Explanation: All market forms except perfect competition are imperfect competitions.
2. Option B
Explanation: In oligopoly, there are a few large firms in the market.
3. Option D
Explanation: In monopolistic competition, there are a large number of firms selling differentiated products.
4. Option C
Explanation: In the long-run, because of entry and exist of firms all firms earn zero economic profit.
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