IV. Choose the correct alternative to complete the text

The rare situation in which all producers are too small to affect the market price is called (1) ……. Where even one producer can affect the price of a good by increasing or withholding output there is (2) ……. A market with only one producer who can fix an artificial price is called a (3)……. The opposite situation, where there is only one buyer – e. g. for defence system – is described as (4) ……..

The situation where there are only a few sellers is called (5) …….This frequently arises in manufacturing industry because of economies of scale - continuously declining unit costs as production increases – and the cost barrier of entering an industry. A (6) ……is where companies in the same industry collaborate by coordinating prices, sharing out markets, etc. In many countries, including the USA, this is illegal, under (7) ……. The situation in which there are only a small number of relatively large buyers in a market is (8) …….

Some monopolies are legal. For example, inventors are granted (9) ……….. that give them monopolistic privileges for a certain length of time. There are also natural monopolies, such as water, gas, electricity and telephones where it may not be economic to have a large number of competing companies laying cables of pipes to the same consumers. Consequently, (10) …… companies such as these are frequently granted monopolies, but with prices regulated by the government.

1. a. communism b. oligopoly c. perfect competition

2. a. capitalism b. monopoly c. imperfect competition

3. a. competitive advantage b. monopoly c. monopsony

4. a. nationalization b. monopoly c. monopsony

5. a. an oligopoly b. an oligopsony c. a recession

6 a. cartel b. conglomerate c. conspiracy

7. a. anti – trust laws b. honesty laws c. trust laws

8. a. a concentration b. an oligopoly c. an oligopsony

9. a. licences b. patents c. trademarks

10 a. useful b. utility c. utilitarian