Market Structures and Competition

Question 1

Natural monopolies occur when one producer

Revolt · Accepted Answer

can meet the market’s entire demand.

Question 2

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

Revolt · Accepted Answer

cell phone carriers

Question 3

In pure competition, producers compete exclusively on the basis of

Revolt · Accepted Answer

selling identical items.

Question 4

Why is competition limited in an oligopoly?

Revolt · Accepted Answer

High entry costs prevent new producers from entering the market.

Question 5

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

Revolt · Accepted Answer

by creating and running a monopoly

Question 6

Which best describes the availability of substitutes in a monopoly?

Revolt · Accepted Answer

There are no substitutes.

Question 7

Which helps enable an oligopoly to form within a market?

Revolt · Accepted Answer

Costs of starting a competing business are too high.

Question 8

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

Revolt · Accepted Answer

the US Postal Service

Question 9

If consumer sovereignty is considered greatest in a system of pure competition, why is sovereignty still limited?

Revolt · Accepted Answer

Choices are driven by price when goods are identical.

Question 10

Who sets the price in a monopolistic competition?

Revolt · Accepted Answer

producers and consumers

Market Structures and Competition Answers