This quiz works best with JavaScript enabled. Home > Finance > Economics > Market Dynamics > Market Structures > Market Structures – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Market Structures Quiz 4 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. MANY COMPANIES COMPETE IN AN OPEN MARKET TO SELL PRODUCTS THAT ARE SIMILAR BUT NOT IDENTICAL A) PERFECT COMPETITION. B) MONOPOLISTIC COMPETITION. C) OLIGOPOLY. D) MONOPOLY. Show Answer Correct Answer: B) MONOPOLISTIC COMPETITION. 2. 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) Hire more employees until marginal cost equals marginal revenue. C) Fire several employees to keep production costs down. D) Fire his new employee due to the new marginal cost being to high. Show Answer Correct Answer: B) Hire more employees until marginal cost equals marginal revenue. 3. When there is only one seller of a good or service, they are said to have a? A) Oligarchy. B) Monopolistic Competition. C) Perfect Competition. D) Monopoly. Show Answer Correct Answer: D) Monopoly. 4. What happens to the market price when new firms enter the industry? A) The market price remains the same. B) The market price decreases. C) The market price fluctuates. D) The market price increases. Show Answer Correct Answer: B) The market price decreases. 5. 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. 6. True or False:Countries try lower taxes on multi-national companies with the hopes of having them build business in their land. A) False. B) True. Show Answer Correct Answer: B) True. 7. An ..... is a market structure characterized by only a few sellers of a product who dominate the market. (Examples:breakfast cereals and natural gas) A) Monopoly. B) Oligopoly. C) Cartel. D) Perfect competition. Show Answer Correct Answer: B) Oligopoly. 8. Which type of monopoly is allowed to exist because they are the only company in an area that is willing and capable of producing? A) Natural Monopoly. B) Government Monopoly. C) Geographic Monopoly. D) Technological Monopoly. Show Answer Correct Answer: C) Geographic Monopoly. 9. When consumers are divided into groups and charged differently it is called A) Monopoly. B) Franchise. C) Price discrimination. D) Making a profit. Show Answer Correct Answer: C) Price discrimination. 10. NPF-Increase in personal tax rates. What curve is impacted in the TV market and how? A) Demand Left. B) Demand Right. C) Supply Left. D) Supply Right. Show Answer Correct Answer: A) Demand Left. 11. In this business organization, a major advantage is the product is well known and has national advertising. A) Corporation. B) Partnership. C) Sole proprietorship. D) Franchise. Show Answer Correct Answer: D) Franchise. 12. Why do cartels NOT last? A) Members have to keep agreement. B) Illegal. C) Products are competitive. D) They lose money. Show Answer Correct Answer: A) Members have to keep agreement. 13. Explain the concept of interdependence in an oligopoly market. A) Interdependence means each firm operates independently without any impact on other firms. B) Interdependence is the concept of firms in a market not being affected by the actions of other firms. C) Interdependence refers to the situation where firms collude to fix prices and output. D) Interdependence refers to the situation where the actions of one firm directly affect the performance and decisions of other firms in the market. Show Answer Correct Answer: D) Interdependence refers to the situation where the actions of one firm directly affect the performance and decisions of other firms in the market. 14. How much influence one company have over the price of the product in the market is called what? A) Making profit. B) Degree of Influence. C) Price Taker. D) Market Control. Show Answer Correct Answer: D) Market Control. 15. What is the difference between perfect competition and monopolistic competition? A) Perfect competition involves differentiated products and no control over price, while monopolistic competition involves identical products and some control over price. B) Perfect competition involves differentiated products and some control over price, while monopolistic competition involves identical products and no control over price. C) Perfect competition involves identical products and some control over price, while monopolistic competition involves differentiated products and no control over price. D) The main difference is that perfect competition involves identical products and no control over price, while monopolistic competition involves differentiated products and some control over price. tagsSSEMI3. Show Answer Correct Answer: D) The main difference is that perfect competition involves identical products and no control over price, while monopolistic competition involves differentiated products and some control over price. tagsSSEMI3. 16. Advertising and innovation are non-price competition strategies most common in perfect competition markets. A) TRUE. B) FALSE. Show Answer Correct Answer: B) FALSE. 17. Trent is opening a shoe store. He needs money to rent a retail space, buy shoes to stock in the store, pay employees, and make advertisements. These are examples of ..... A) Barriers to entry. B) Corporate taxes. C) Start-up costs. D) Opportunity costs. Show Answer Correct Answer: C) Start-up costs. 18. A government issued right to operate a business A) Registered trademark. B) License. C) Copyright. D) Patent. Show Answer Correct Answer: B) License. 19. A condition of a Monopolistic Competitive market is that products are similar but not identical. A) True. B) False. C) It depends on the product. D) None of above. Show Answer Correct Answer: A) True. 20. In the short run, when MONOPOLISTIC COMPETITON experiences economic profit, A) New firms will enter the market. B) Existing firms in the monopolistic competition will exit. Show Answer Correct Answer: A) New firms will enter the market. 21. SSEMI3 If a business fails to meet its financial obligations, the owner (or owners) are personally responsible for those debts. A) Limited liability. B) Unlimited liability. C) Contract. D) Articles of partnership. Show Answer Correct Answer: B) Unlimited liability. 22. How might an oligopoly control prices? A) Collusion. B) Price leadership. C) Nonprice competition. D) All of the above. Show Answer Correct Answer: D) All of the above. 23. Which type of market structure is the corn industry? A) Oligopoly. B) Monopoly. C) Monopolistic competition. D) Perfect competition. Show Answer Correct Answer: D) Perfect competition. 24. Extra cost of producing one more unit A) Fixed Cost. B) Average Cost. C) Variable Cost. D) Marginal cost. Show Answer Correct Answer: D) Marginal cost. 25. Monopoly is characterised by A) Only one firm. No substitutes. The firm is a price taker. B) Only one firm. No substitutes. The firm is a price maker. Show Answer Correct Answer: B) Only one firm. No substitutes. The firm is a price maker. 26. Which market structure has no control over price? A) Monopoly. B) Oligopoly. C) Perfect Competition. D) Monopolistic Competition. Show Answer Correct Answer: C) Perfect Competition. 27. OPEC is an example of a A) Patent. B) Monopolistic competition. C) Natural monopoly. D) Cartel. Show Answer Correct Answer: D) Cartel. 28. Which of the following is not a type of legal monopoly? A) Natural monopoly. B) Geographic monopoly. C) Government monopoly. D) Standard Oil. Show Answer Correct Answer: D) Standard Oil. 29. An industry described as a monopolistic competition would have most likely have A) One firm with no close rivals. B) Normal profits in the long run. C) No opportunities of collusive behavior. D) Similar but differentiated products. Show Answer Correct Answer: D) Similar but differentiated products. 30. Which of the following is not a characteristic of an oligopoly? A) Many barriers to entry. B) Lots of advertising. C) Not as much competition-firms have some control over prices. D) Many sellers. Show Answer Correct Answer: D) Many sellers. ← PreviousNext →Related QuizzesMarket Dynamics QuizzesEconomics QuizzesMarket Structures Quiz 1Market Structures Quiz 2Market Structures Quiz 3Market Structures Quiz 5Market Structures Quiz 6Market Structures Quiz 7Market Structures Quiz 8Market Structures Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books