Unit 6: Market Structure - Practice Quiz

1 What does the term market structure primarily refer to?

2 Which of the following is a key basis for classifying market structures?

3 Which market structure has the largest number of sellers?

4 A market with a single seller is known as a:

5 In perfect competition, an individual firm is best described as a:

6 The demand curve faced by a firm under perfect competition is:

7 For a firm in perfect competition, price is equal to:

8 The profit-maximizing condition common to firms in all market structures is:

9 In long-run equilibrium under perfect competition, firms earn:

10 Which of the following is a feature of perfect competition?

11 A monopolist's demand curve is:

12 Under monopoly, marginal revenue is:

13 Which of the following best describes a barrier to entry in a monopoly?

14 The practice of charging different prices to different buyers for the same product is called:

15 Monopolistic competition is characterized by:

16 Product differentiation under monopolistic competition means:

17 Which activity is especially important for firms in monopolistic competition?

18 In the long run, firms under monopolistic competition tend to earn:

19 A key difference between monopoly and perfect competition is that a monopolist:

20 Which market structure is characterized by a few large firms that are interdependent?

21 A firm sells a product identical to those of thousands of rivals, has no control over price, and faces no barriers to entry. Which market structure best describes this situation?

22 Product differentiation is a key feature that separates monopolistic competition from perfect competition mainly because it gives each firm:

23 Which of the following would most strongly indicate that a market is a monopoly rather than an oligopoly?

24 For a firm in perfect competition, the demand curve it faces is:

25 A perfectly competitive firm maximises profit by producing where:

26 In perfect competition, the market price is $10 and a firm's average total cost at its profit-maximising output is $12. In the short run, the firm should:

27 The short-run shutdown point of a perfectly competitive firm occurs where price equals the minimum of:

28 In long-run equilibrium under perfect competition, each firm earns:

29 A competitive firm faces a market price of $8. Its marginal cost function is $MC = 2 + 2Q$. Its profit-maximising output is:

30 The short-run supply curve of a perfectly competitive firm is its:

31 A monopolist maximises profit by choosing output where and then sets price according to the:

32 For a monopolist, why does marginal revenue lie below the price (average revenue) at every output beyond the first unit?

33 A monopolist faces demand and constant . Its profit-maximising output is:

34 Using demand with profit-maximising output , the price the monopolist charges is:

35 Compared with perfect competition, a monopoly typically results in:

36 Price discrimination by a monopolist is possible only when the firm can:

37 In long-run equilibrium under monopolistic competition, a typical firm earns only normal profit because:

38 A key source of inefficiency under monopolistic competition is that in long-run equilibrium the firm produces where:

39 Which activity is most characteristic of firms in monopolistic competition but not perfect competition?

40 A monopolist's total revenue is maximised at the output where:

41 A perfectly competitive firm has the total cost function . The market price is . What is the profit-maximizing output and the resulting profit?

42 A monopolist faces demand with (constant). What is the Lerner Index of monopoly power at the profit-maximizing output?

43 A competitive firm's total cost is . Below what price should the firm shut down in the short run?

44 A monopolist practices first-degree (perfect) price discrimination. Compared to a single-price monopoly, which statement is correct?

45 In long-run equilibrium under monopolistic competition, which condition holds true?

46 The market demand is and market supply is . If a per-unit tax of is imposed on producers, what is the new price paid by consumers?

47 A monopolist has and faces a demand with price elasticity of at the current price. Using the inverse elasticity rule, what is the profit-maximizing price?

48 Two firms have market shares of and ; a second market has shares and . Comparing Herfindahl-Hirschman Index (HHI) values, which is correct?

49 In long-run competitive equilibrium, a firm's cost gives minimum average cost of at output . Which statement must be true?

50 A monopolist faces and . What is the deadweight loss relative to the competitive outcome?

51 Which combination of features uniquely distinguishes monopolistic competition from both perfect competition and monopoly?

52 A competitive industry has 100 identical firms, each with . Market demand is . What is the equilibrium market price?

53 A natural monopoly has declining average cost throughout the relevant range. If a regulator sets price equal to marginal cost, what problem arises?

54 A monopolist sells in two separable markets: Market 1 has elasticity , Market 2 has elasticity . Which market receives the higher price?

55 A competitive firm faces price with . At what positive output does the firm maximize profit?

56 For a monopolist, marginal revenue is expressed as . If demand is unit elastic (), what is true of and total revenue?

57 A market has firms with shares . What is the four-firm concentration ratio and what does it imply?

58 In a constant-cost competitive industry, demand rises permanently. What describes the long-run adjustment?

59 A monopolistically competitive firm earns short-run economic profit. Which sequence correctly describes the movement to long-run equilibrium?

60 Compared with perfect competition, a monopolistically competitive firm in long-run equilibrium exhibits which inefficiency?