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QuizMultiple Choice

Market Structures and Competition — Unit test

Question 1 • * HSA 26-27 Economics

Which helps enable an oligopoly to form within a market?

Answer
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.

Explanation

High startup costs make it difficult for new firms to enter a market and challenge existing businesses. This barrier to entry can leave a small number of firms in control, which is the defining feature of an oligopoly. Government restrictions can also limit entry, but the choice that directly describes a common market barrier is “Costs of starting a competing business are too high.”

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