Market Forms

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1
The diagram to your left refers to which type of market?
monopoly.
monopolistic competition.
oligopoly.
perfect competition.
2
How would you describe this demand curve?
elastic
inelastic
oligopoly
monopoly
3
How would you describe this demand curve?
flat
inelastic
perfectly elastic
unitary elastic
4 What reason would you give to justify your answer to Question 3?
The flat demand curve indicates the good has perfect substitutes that cannot be differentiated from similar goods produced by other firms.
The products are the same.
The goods are produced by Government owned firms and there is no competition permitted.
My teacher told me it was the case.
5
How would you describe this demand curve?
perfectly elastic
elastic
unitary elasticity
inelastic
6 How many suppliers (sellers) can there be in a perfectly competitive market?
One
A few
Many
Potentially a very large number.
7
In what type of market would you expect to find a demand curve like the one to your left?
Perfectly competitive
Monopolistically competitive
Oligopoly
Monopoly
8 How many suppliers (sellers) can there be in a monopolistically competitive market?
One
A few
Many
Potentially a very large number.
9 How many suppliers (sellers) can there be in an oligopolistic market?
One
A few
Many
Potentially very many.
10 How many suppliers (sellers) can there be in an monopolistic market?
One
A few
Many
Potentially a very large number
11 How would you describe the barriers to entry into a perfectly competitive market?
High; large amounts of investment capital are required to enter a market of this type.
Reasonably high; start up costs are less than $1 million.
Quite low; set up costs are relatively small
Very low; a market of this type can be entered by small, new firms, with low levels of investment capital.
12 How would you describe the barriers to entry into a monopolistically competitive market?
High; large amounts of investment capital are required to enter a market of this type.
Reasonably high; start up costs are less than $1 million.
Quite low; set up costs are relatively small.
Very low; a market of this type can be entered by small, new firms, with low levels of investment capital.
13 How would you describe the barriers to entry into an oligopolistically competitive market?
High; large amounts of investment capital are required to enter a market of this type.
Reasonably high; start up costs are less than $1 million.
Quite low; set up costs are relatively small.
Very low; a market of this type can be entered by small, new firms, with low levels of investment capital.
14 How would you describe the barriers to entry into market dominated by an existing monopoly?
High; large amounts of investment capital are required to enter a market of this type.
Entry into the market may be impossible.
Quite low; set up costs are relatively small.
Very low; a market of this type can be entered by small, new firms, with low levels of investment capital.
15 How would you describe the nature of the product produced in a perfectly competitive market?
All firms in the market produce identical products (homogeneous).
The product of one firm is very similar to the product of another firm, but the two can be differentiated by consumers (heterogeneous).
The product is technologically advanced and most consumers, unless they have a degree in rocket science can't tell one from another.
The product comes uniform packaging and is sold by weight.
16 How would you describe the nature of the product produced in a monopolistically competitive market?
All firms in the market produce identical products (homogeneous).
The product is technologically advanced and most consumers, unless they have a degree in rocket science can't tell one from another.
The product of one firm is very similar to the product of another firm, but the two can be differentiated by consumers (heterogeneous).
The product comes uniform packaging and is sold by weight.
17 How would you describe the nature of the product produced in an oligopolistically competitive market?
All firms in the market produce identical products (homogeneous).
The product of one firm is very similar or even identical to the product of another firm, but the two can be differentiated by consumers (heterogeneous).
Extensive advertising has brainwashed consumers into believing the product will be so good it can cure cancer.
The product comes uniform packaging and is sold by weight.
18 How would you describe the nature of the product produced in a market dominated by a monopoly?
All firms in the market produce identical products (homogeneous).
The product of one firm is very similar or even identical to the product of another firm, but the two can be differentiated by consumers (heterogeneous).
The product has no close substitutes.
The product comes uniform packaging and is sold by weight.
19 How much control over price does a supplier in a perfectly competitive market have?
None; all firms have a small share of the total market and all firms are therefore ''price takers''.
Some, although this will require extensive advertising to convince consumers there is a difference between the products of two different firms.
A reasonable amount; in established markets like these consumers have long term experience of the product and ''brand loyalty'' has developed over time.
Total control; consumers have no other supplier to turn to; the firm is therefore a ''price maker''.
20 How much control over price does a supplier in a monopolistically competitive market have?
None; all firms have a small share of the total market and all firms are therefore ''price takers''.
Some, although this will require extensive advertising or other ''non price'' forms of competition to convince consumers there is a difference between the products of two different firms.
A reasonable amount; in established markets like these consumers have long term experience of the product and ''brand loyalty'' has developed over time.
Total control; consumers have no other supplier to turn to; the firm is therefore a ''price maker''.
21 How much control over price does a supplier in a oligopolistically competitive market have?
None; all firms have a small share of the total market and all firms are therefore ''price takers''.
Some, although this will require extensive advertising or other ''non price'' forms of competition to convince consumers there is a difference between the products of two different firms.
A reasonable amount; in established markets like these consumers have long term experience of the product and ''brand loyalty'' has developed over time.
Total control; consumers have no other supplier to turn to; the firm is therefore a ''price maker''.
22 How much control over price does a supplier in a monopoly have?
None; all firms have a small share of the total market and all firms are therefore ''price takers''.
Some, although this will require extensive advertising or other ''non price'' forms of competition to convince consumers there is a difference between the products of two different firms.
A reasonable amount; in established markets like these consumers have long term experience of the product and ''brand loyalty'' has developed over time.
Total control; consumers have no other supplier to turn to; the firm is therefore a ''price maker''.
23 An example of a perfectly competitive market is
telecommunications.
petrol distribution.
the wheat or coal markets.
women's fashion retailing.
24 An example of a monopolistically competitive market is
telecommunications.
petrol distribution.
the wheat or coal markets.
women's fashion retailing.
25 An example of an oligopolistically competitive market is
the provision of mobile telephone services
the wheat or coal markets.
women's fashion retailing.
tourism.
26 An example of a monopoly market is
telecommunications.
fresh fruit and vegetables.
hairdressing.
the provision of petrol in Odnawillywup (a town of ten people, 300 kilometres due west of Alice Springs).