AnswersAA - F26 Personal Finance and EconomicsMarket Structures and Competition

Market Structures and Competition — Unit test Answers

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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.
3

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.
4

Which best describes the availability of substitutes in a monopoly?

A
Price points vary.
B
There are no substitutes.
C
There are different brands.
D
Products have different features.
5

SovereigntyCompetitionOligopoly

A
Sovereignty
B
Competition
C
Oligopoly
7

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.
8

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.
9

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.
10

The lack of competition within a monopoly means that

A
offered goods and services are lackluster.
B
the product’s market is small.
C
consumers must look elsewhere to find options.
D
monopolists set their own price.

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Market Structures and Competition — Unit test…