Market Structures and Competition Answers

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Which best describes how the government sanctions technological monopolies?

A
by creating the technology itself
B
by prohibiting others from entering the market
C
by issuing a patent for the technology
D
by authorizing one producer
3

Why is competition limited in an oligopoly?

A
High entry costs prevent new producers from entering the market.
B
Producers completely refuse to engage in price wars.
C
No major distinctions exist between producers.
D
Producers actively segment the market to avoid competition.
4

Which helps enable an oligopoly to form within a market?

A
Costs of starting a competing business are too high.
B
The government restricts market entry.
C
The number of options in a market confuses consumers.
D
No competition exists between producers.
5

Which is an example of a government monopoly in the United States?

A
the US Postal Service
B
the Internal Revenue Service (IRS)
C
the US Environmental Protection Agency (EPA)
D
the National Park Service
6

In the United States, which type of industry is often considered part of an oligopoly?

A
electric companies
B
cell phone carriers
C
mail delivery services
D
denim companies
7

Why is the automobile industry considered an oligopoly? Select all that apply.It offers little differentiation within the market.It has significant barriers to entry.It is controlled by companies that patent key technology.It relies on price variation to attract customers.It depends on brand loyalty and image to generate sales.It is dominated by a few key players.

A
It offers little differentiation within the market.
B
It has significant barriers to entry.
C
It is controlled by companies that patent key technology.
D
It relies on price variation to attract customers.
E
It depends on brand loyalty and image to generate sales.
F
It is dominated by a few key players.
8

Natural monopolies occur when one producer

A
can meet the market’s entire demand.
B
controls the method of production.
C
is the only one authorized to produce a given product.
D
creates unique products.
9

In pure competition, producers compete exclusively on the basis of

A
selling identical items.
B
advertising heavily to promote their good.
C
producing the unique features of their good.
D
focusing on maintaining a positive image.
10

Which best describes how the government enables government monopolies to exist?

A
by issuing a patent
B
by allowing natural monopolies to exist
C
by creating and running a monopoly
D
by owning the means of production

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