Multiple Choice
Identify the
letter of the choice that best completes the statement or answers the question.
|
|
|
1.
|
What
is the best definition of Market Structure?
a. | How much
competition exist in a given market | c. | The average price charged for products in a given
market | b. | The average number of firms in each
market
| d. | The number of
firms entering and leaving a given market | | | | |
|
|
|
2.
|
Perfect Competition has all of the following characteristics
except:
a. | They sell identical products | c. | All companies sell their products for the same
price | b. | Merchants can enter and leave the market at
will
| d. | Companies know
everything about their customers. | | | | |
|
|
|
3.
|
What kind of
market runs most efficiently when one large firm supplies all of the output?
a. | monopoly | c. | perfect
competition | b. | a network | d. | imperfect competition
| | | | |
|
|
|
4.
|
What is
monopolistic competition?
a. | one company selling the identical product under different
names | b. | one company selling several different products under different
names | c. | a very few companies selling identical
products | d. | many companies selling similar but not identical
products
| | |
|
|
|
5.
|
Which of the
following is NOT a form of nonprice competition?
a. | location | c. | advertising | b. | physical characteristics
| d. | discounts | | | | |
|
|
|
6.
|
What happens
to a monopolistically competitive firm that begins to charge an excessive price for its
product?
a. | The firm will go out of
business. | b. | Consumers will substitute a rival’s
product. | c. | Consumers will boycott the product. | d. | The government will
regulate the price.
| | |
|
|
|
7.
|
Which of the
following is NOT a condition for perfect competition?
a. | Many buyers and sellers
participate in the market. | b. | Sellers offer a wide variety of products. | c. | Buyers and sellers are
well informed about products. | d. | Sellers are able to enter and exit the market
freely.
| | |
|
|
|
8.
|
When
are monopolies allowed to exist?
a. | They are never allowed | c. | When it is in the public’s best
interest | b. | When no company can make a
profit
| d. | When the company
produces something needed for national defense.
| | | | |
|