Question

Each bin below is labeled with one of four market structures. Identify the characteristics associated with each market structure and place the eight items below in the appropriate bin. Perfect Competition Monopolistic Competition Oligopoly Monopoly A single firm that produces a unique product with no close substitutes. The single firm has considerable control over the price it charges for the product it produces, and the entry of new firms into the industry is blocked. Individual firms are price takers, and firms can easily enter or exit the industry. The demand curve for an individual firms output is a horizontal line. There are a few firms and the ease of entry of new firms is low. A very large number of firms that produce an identical product Many firms that produce a differentiated product.

Answer 1

Perfect Competition:

Individual firms are price takers, and firms can easily enter or exit the industry.

The demand curve for an individual firm’s output is horizontal line.

A very large number of firms that produce an identical product.

Monopolistic Competition:

Many firms that produce a differentiated product.

Oligopoly:

There are a few firms and the ease of entry of new firms is low.

Monopoly:

A single firm that produces a unique product with no close substitutes.

The single firm has considerable control over the price it charges for the product it produces, and the entry of new firms into the industry is blocked.