Question

[7] Markets with a large number of sellers producing identical products, and that are easy to enter and exit are:

A) oligopolistic.

B) monopolized.

C) purely competitive.

D) monopolistically competitive.

[8] An individual seller has no control over the price of its product in:

A) oligopoly.

B) pure competition.

C) monopolistic competition.

D) all of the above.

[9] The price a purely competitive seller can get for its product is determined by:

A) government regulators.

B) the forces of supply and demand in the market.

C) agreements made by sellers in trade association meetings.

D) the seller's bargaining power when dealing with potential buyers.

[10] A purely competitive seller's demand curve for its product is perfectly horizontal because:

A) there is no nonprice competition.

B) the market is difficult to enter and exit.

C) there are other sellers in the firm's market.

D) the firm has no control over the price it receives for its product.

[11] Markets with a large number of firms selling differentiated products, and where entry into and exit from the market are fairly easy, are:

A) oligopolies.

B) monopolies.

C) pure competitors.

D) monopolistic competitors.

[12] A market has a large number of sellers that produce differentiated products and have limited control over their prices. Entry into this market by new sellers is fairly easy. This market is:

A) an oligopoly.

B) monopolized.

C) purely competitive.

D) monopolistically competitive.

Answer 1

Characteristics of perfectly competitive market

1. Homogeneous product
2. Large number of buyers and sellers
3. All firms are price taker that no firm has market power to influence the price of the product
4. No entry or exit barrier

Now refer the solution

7. C. Purely Competition

8. B. Pure competition

9. B. The forces of supply and demand in the market.

10. D. The firm has no control over the price it receives for its product.

11. Monopolistic competition is characterized by large number of firms with differentiated product.

D. Monopolistic Competition

12. D. Monopolistic competition

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