Which of the following is a characteristic of a competitive market?
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B. A competitive market has many buyers and sellers, which ensures no single entity can control the market price.
In a competitive market, the price of a good is determined by:
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C. In a competitive market, the price is determined by the interaction of demand and supply, not by any single entity.
Which of the following is an example of a competitive market?
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B. The stock market is an example of a competitive market with many buyers and sellers.
What is a key feature of a monopoly market?
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C. A monopoly market has a single seller who controls the market.
Which of the following is a characteristic of a monopoly market?
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C. A monopoly firm is a price maker because it has the power to set prices due to lack of competition.
In a monopoly market, the demand curve for the firm's product is:
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C. In a monopoly, the demand curve is downward sloping because the firm can influence the market price by changing the quantity it sells.
Which of the following is an example of a monopoly market?
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B. The market for a patented medicine is an example of a monopoly because the patent holder is the sole provider.
What is a barrier to entry in a monopoly market?
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C. Barriers to entry in a monopoly market can include legal restrictions, such as patents, or ownership of key resources.
In a competitive market, firms are:
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B. In a competitive market, firms are price takers because no single firm has the power to influence the market price.
Which of the following is a result of a monopoly market?
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C. Monopoly markets often result in higher prices and lower output compared to competitive markets due to lack of competition.
What is the main difference between a competitive market and a monopoly market?
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B. The main difference is the number of sellers; a competitive market has many sellers, while a monopoly has only one.
In a competitive market, the demand curve for an individual firm is:
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B. In a competitive market, the demand curve for an individual firm is perfectly elastic because the firm can sell all it wants at the market price.
Which of the following is a reason why monopolies might form?
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C. Monopolies might form due to economies of scale, which reduce average costs as output increases, and control of key resources.
In a monopoly market, the firm's profit maximisation condition is:
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A. In a monopoly, profit is maximised where marginal cost equals marginal revenue, similar to a competitive firm, but the price is set above marginal cost.
What is the likely outcome if a competitive market becomes a monopoly?
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C. If a competitive market becomes a monopoly, prices are likely to increase and output is likely to decrease due to the lack of competition.