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Competition & Monopoly

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Business/Economics Quiz on Competition & Monopoly , created by Vashti Braynen on 19/04/2021.
Vashti Braynen
Quiz by Vashti Braynen, updated more than 1 year ago
Vashti Braynen
Created by Vashti Braynen over 3 years ago
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Resource summary

Question 1

Question
Under perfect competition, output is determined by:
Answer
  • A. Demand and equilibrium price
  • B. Fixed expenses
  • C. Individuals
  • D. Industry supply curve

Question 2

Question
Which of the following is NOT a characteristic of a perfectly competitive market?
Answer
  • A. Free entry and exit
  • B. No substitutes
  • C. Numerous sellers
  • D. Perfect information

Question 3

Question
Perfect competition pushes firms to
Answer
  • A. Efficiency
  • B. Maximum possible output
  • C. Maximum sales
  • D. Take over other firms

Question 4

Question
A factor that makes it difficult for firms to enter a market is called...
Answer
  • A. A barrier to entry
  • B. A block to entry
  • C. An impediment to entry
  • D. An obstacle to entry

Question 5

Question
Which is not a requirement for a market to have perfect competition?
Answer
  • A. Consumers and producers are informed about products
  • B. Diverse buyers and sellers participate in a market
  • C. Sellers can freely enter and exit the market
  • D. Sellers offer the same products

Question 6

Question
In a perfectly competitive market, a firm
Answer
  • A. Can easily take control of the market
  • B. Can influence the price of the good across the market
  • C. Only has control over how much they decide to produce
  • D. Can influence demand across the market through advertising

Question 7

Question
Perfect competition is best described as a market with
Answer
  • A. Few firms producing essentially the same product
  • B. Few firms producing very different products
  • C. Many firms producing essentially the same product
  • D. Many firms producing very different products

Question 8

Question
The market demand curve for a perfectly competitive industry is QD = 12 - 2P. The market supply curve is QS = 3 + P. The market will be in equilibrium if
Answer
  • A. P = 3 and Q = 6
  • B. P = 6 and Q = 9
  • C. P = 5 and Q = 2
  • D. P = 4 and Q = 4

Question 9

Question
A perfectly competitive firm should reduce output or shut down in the short run if market price is equal to marginal cost and price is
Answer
  • A. Greater than average total cost
  • B. Less than average total cost
  • C. Greater than average variable cost
  • D. Less than average variable cost

Question 10

Question
If the market demand curve for a commodity has a negative slope, then the market structure must be
Answer
  • A. Perfect competition
  • B. Monopoly
  • C. Imperfect competition
  • D. The market structure cannot be determined from the information given

Question 11

Question
If a firm sells its output on a market that is characterized by many sellers and buyers, a homogeneous product, unlimited long-run resource mobility, and perfect knowledge, then the firm is a
Answer
  • A. A monopolist
  • B. A monopolistic competitor
  • C. An oligopolist
  • D. A perfect competitor

Question 12

Question
If a firm sells its output on a market that is characterized by a single seller and many buyers of a homogeneous product for which there are no close substitutes and barriers to long-run resource mobility, then the firm is
Answer
  • A. A monopolist
  • B. A monopolistic competitor
  • C. An oligopolist
  • D. A perfect competitor

Question 13

Question
If a firm sells its output on a market that is characterized by many sellers and buyers, a differentiated product, and unlimited long-run resource mobility, then the firm is
Answer
  • A. A monopolist
  • B. A monopolistic competitor
  • C. An oligopolist
  • D. A perfect competitor

Question 14

Question
If a firm sells its output on a market that is characterized by few sellers and many buyers and limited long-run resource mobility, then the firm is
Answer
  • A. A monopolist
  • B. A monopolistic competitor
  • C. An oligopolist
  • D. A perfect competitor

Question 15

Question
Branding their goods and making the brand name familiar by means of advertising is an example of non-price competition.
Answer
  • True
  • False

Question 16

Question
Monopolies CANNOT be created by law.
Answer
  • True
  • False

Question 17

Question
Legal monopolies tend to consist of nationalised industries.
Answer
  • True
  • False

Question 18

Question
Restrictive trade practices occur when firms in an industry agree to not compete with each other but to restrict the entry of any new firm.
Answer
  • True
  • False

Question 19

Question
The Organization of Petroleum is a form of a cartel.
Answer
  • True
  • False

Question 20

Question
A monopoly is NOT capable of restricting the supply of a product.
Answer
  • True
  • False

Question 21

Question
Large scale production may enable firms to produce at a very low average cost is a barrier to entry.
Answer
  • True
  • False
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