AnswersHSA 26-27 EconomicsMarket Structures and Competition

Market Structures and Competition Answers

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1
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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.
3

The lack of competition within a monopoly means that

o
offered goods and services are lackluster.
t
the product’s market is small.
c
consumers must look elsewhere to find options.
m
monopolists set their own price.
4

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

A
Consumers still rely on producers’ set prices.
B
Few products are actually sold on the basis of pure competition.
C
Choices are driven by price when goods are identical.
D
Limited price variations restrict actual choice.
5

Why is competition limited in an oligopoly?

H
High entry costs prevent new producers from entering the market.
P
Producers completely refuse to engage in price wars.
N
No major distinctions exist between producers.
P
Producers actively segment the market to avoid competition.
6

most likely

n
natural monopoly
d
de facto monopoly
g
government monopoly
t
technological monopoly
8

In an oligopolistic market, consumer choice is

n
nonexistent.
l
limited.
e
extensive.
i
infinite.
9

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

l
local electric utility service
c
cell phone carrier service
U
USPS letter-mail service
r
retail denim sales
10

[BLANK]

A
Monopolistic
B
Pure competition
C
An oligopoly

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Market Structures and Competition Answers — HSA…