VI. Complete the following sentences:

1. Economists classify markets according ... . 2. They ask questions like the following ... . 3. The answer to these questions helps ... . 4. One market may be highly competitive because ... . 5. Another may be less competitive ... . 6. In short, markets can be classified according to ... . 7. Economists have names for these different market structures ... . 8. Pure competition is a market situation ... . 9. To monopolize means ... . 10. The one thing that separates monopolistic competition from pure competition is ... .

VII. Match each term in Column a with its definition in Column b:

Column A Column B

1. monopoly	a. The process of creating uniqueness in a product.
2. oligopoly	b. A market dominated by a few large firms.
3. pure competition	c. A market in which there is only one seller.
4. monopolistic competition	d. Place where buyers and sellers come together.
5. product differentiation	e. The price at which supply exactly equals demand.
6. competition	f. A market situation in which there are many independent and well-informed buyers and sellers of exactly the same economic products.
7. market	g. The rivalry among buyers and sellers in the purchase and sale of resources and products.
8. market price	h. A market in which many firms are selling similar (but not identical) products.

VIII. Define which of the following items best completes

the statement:

1. A competitive market

a. has many buyers and sellers.

b. is dominated by a few large firms.

c. is regulated by the government.

d. includes monopolies and oligopolies.

2. A market with a few large firms is called

a. a monopoly.

b. pure competition.

c. an oligopoly.

d. monopolistic competition.

3. Competition in the marketplace is important because it

a. limits the effects of supply and demand.

b. eliminates the profit motive.

c. gives producers the incentive to be efficient.

d. creates a market where producers can control prices.

4. The American government

a. is not involved in influencing markets.

b. regulates various aspects of business activity.

c. owns most US businesses.

d. does not produce any goods and services.

5. Which of the following best explains why certain industries are

dominated by large firms?

a. Large firms are always more efficient than small ones.

b. The American people have lost faith in the competitive market system.

c. Patent laws are easily ignored.

d. Only large firms can afford the necessary factories and equipment.

IX. Ask someone:

if markets can be classified according to certain structural characteristics that are shared by most firms in the market; each buyer or seller acts independently in the market; a firm may try to attract more customers and take over the economic market;

what questions economists ask; helps to determine market structure, or the nature and degree of competition among firms operating in the same market; is the difference between highly and less competitive market; names the economists have for different market structures; is pure competition; they depend on; «to monopolize» means; situation is called monopolistic competition; separates monopolistic competition from pure competition; may be the difference among the products;

when the price may be raised a little above the market price;

how economists classify markets.