CHAPTER 1 Understanding Entrepreneurship, Diffusion, and R&D in the Context of Monopolistic Competition I always like to start class with a pop quiz. It is a good way to get the old gray matter going and stirs up a bit of angst and loathing. There are only three matching questions and they all relate to the dominant types of markets: (1) perfectly competitive markets, (2) per- fectly monopolistic markets, and (3) the market hybrid referred to as monopolistic competition. Question 1: Match the market types with their definition 1. Perfectly competitive market 2. Monopoly market 3. Monopolistic competition market a. Many sellers trading a similar product to many buyers b. One seller trading a similar product to many buyers c. Many sellers trading a slightly differentiated product to many buyers If you matched 1 with a, 2 with b, and 3 with c, give yourself one point. Question 2: Now match the types of markets with their percentages of total activity 1. Perfectly competitive market 2. Monopoly market 3. Monopolistic competition market a. Less than 1% b. Less than 1% c. Over 99% If you matched 1 with a, 2 with b, and 3 with c, give yourself one point.