This quiz works best with JavaScript enabled. Home > Economics > Market Dynamics > Market Structures > Market Structures – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Market Structures Quiz 5 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A monopolist is A) A price taker. B) Able to ignore the demand for its product when setting price. C) Able to set the price for its product. D) Able to earn only a normal profit in the long run. Show Answer Correct Answer: C) Able to set the price for its product. 2. Market structure where it is very difficult or impossible to enter because the money required is too large or because of laws that protect this product. A) Perfect Competition. B) Oligopoly. C) Monopolistic Competition. D) Monopoly. Show Answer Correct Answer: D) Monopoly. 3. Which of the following would cause the demand curve to shift to the right? A) A popular toys loses appeal. B) Suppliers expect higher prices in the future. C) Price of a substitute good decreases. D) The average annual income increases. Show Answer Correct Answer: D) The average annual income increases. 4. An example of imperfect competition is when A) A book seller freely exits the market. B) A farmer sells eggs, fruits, and vegetables. C) Buyers receive enough information to make educated buying choices. D) Ice cream sellers join together to influence the price of ice cream sundaes. Show Answer Correct Answer: D) Ice cream sellers join together to influence the price of ice cream sundaes. 5. Agreement by a formal organization of producers to coordinate prices and production A) Collusion. B) Cartel. Show Answer Correct Answer: B) Cartel. 6. What must be true to reach profit maximization? A) MC > MR. B) MR > MC. C) MR < MC. D) MC = MR. Show Answer Correct Answer: D) MC = MR. 7. Which of the following is the BEST explanation for government regulation of the public utilities market? A) The isolated location makes it impossible for any other providers of utilities to compete. B) It is most efficient to allow only one supplier of electricity or water because of economies of scale. C) Providing utilities is not attractive to private companies because of limited opportunities to make a profit. D) The government wishes to reward the technological innovation of the utilities providers with limited competition. Show Answer Correct Answer: B) It is most efficient to allow only one supplier of electricity or water because of economies of scale. 8. In monopoly, the firm is the industry A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 9. What are barriers to entry? A) Factors that make it difficult for a new firm to enter a market. B) An illegal agreement among firms to divide the market, set prices, or limit production. C) A market for a good or service where there is only one supplier. D) A market in which there are many buyers and many sellers of an identical product. Show Answer Correct Answer: A) Factors that make it difficult for a new firm to enter a market. 10. Highest barriers to entry A) Monopoly. B) Oligopoly. Show Answer Correct Answer: A) Monopoly. 11. SSEMI3 What is the greatest advantage of a sole proprietorship? A) All profit go to the single owner. B) Easy to start. C) Makes all decisions. D) None of the above. Show Answer Correct Answer: A) All profit go to the single owner. 12. .... exists where there is only one firm in the market. A) Pure monopoly. B) Natural monopoly. C) Monopoly. D) Monopsons. Show Answer Correct Answer: C) Monopoly. 13. The break-even point (BEP) is obtained when TR>TC A) True. B) False. Show Answer Correct Answer: B) False. 14. Follows these conditions:many sellers; low barriers to enter market; slight control over price; differentiated products A) Perfect competition. B) Monopolistic competition. C) Oligopoly. D) Monopoly. Show Answer Correct Answer: B) Monopolistic competition. 15. Cereal producers are a good example of which type of market structure? A) Perfect competition. B) Monopoly. C) Monopolistic competition. D) Oligopoly. Show Answer Correct Answer: D) Oligopoly. 16. MANY COMPANIES COMPETE IN AN OPEN MARKET TO SELL PRODUCTS THAT ARE SIMILAR BUT NOT IDENTICAL A) OLIGOPOLY. B) MONOPOLY. C) PERFECT COMPETITION. D) MONOPOLISTIC COMPETITION. Show Answer Correct Answer: D) MONOPOLISTIC COMPETITION. 17. Mark has just hired a new employee and his output has increased from 105 to 119. His marginal cost was $ 4.19 but his revenue was $ 18. What should mark do? A) Keep the amount of employees he has since he is making a profit. B) Fire his new employee due to the new marginal cost being to high. C) Hire more employees until marginal cost equals marginal revenue. D) Fire several employees to keep production costs down. Show Answer Correct Answer: C) Hire more employees until marginal cost equals marginal revenue. 18. When there is only one seller of a good or service, they are said to have a? A) Monopoly. B) Oligarchy. C) Monopolistic Competition. D) Perfect Competition. Show Answer Correct Answer: A) Monopoly. 19. What happens to the market price when new firms enter the industry? A) The market price remains the same. B) The market price increases. C) The market price decreases. D) The market price fluctuates. Show Answer Correct Answer: C) The market price decreases. 20. Describe the impact of market power on consumer choice and prices. A) Market power allows firms to influence consumer choice and prices by limiting competition and controlling supply. B) Market power only affects consumer choice, not prices. C) Market power leads to increased competition and lower prices. D) Market power has no impact on consumer choice and prices. Show Answer Correct Answer: A) Market power allows firms to influence consumer choice and prices by limiting competition and controlling supply. ← PreviousNext →Related QuizzesMarket Dynamics QuizzesEconomics QuizzesMarket Structures Quiz 1Market Structures Quiz 2Market Structures Quiz 3Market Structures Quiz 4Market Structures Quiz 6Market Structures Quiz 7Market Structures Quiz 8Market Structures Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books