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14.1   What Is Monopolistic Competition? 1) In monopolistic competition A) firms practice

Question : 14.1   What Is Monopolistic Competition? 1) In monopolistic competition A) firms practice : 1418015

14.1   What Is Monopolistic Competition?

 

1) In monopolistic competition

A) firms practice product differentiation.

B) the goods produced by each firm are identical.

C) firms do not have any control over the price of their products.

D) there are barriers to entry.

E) a small number of firms compete.

 

2) Toronto has a large number of retail stores that sell clothes. Each store has its own characteristics which differ from the other stores. The clothing business in Toronto is an example of

A) a duopoly.

B) an oligopoly.

C) a perfectly competitive market.

D) a monopoly.

E) a monopolistically competitive market.

 

3) A firm in a monopolistically competitive market

A) faces an upward-sloping demand curve.

B) faces a downward-sloping demand curve.

C) practices product differentiation.

D) faces a horizontal demand curve.

E) B and C are correct.

 

4) One factor that distinguishes a monopoly from monopolistic competition is that

A) firms in monopolistic competition practice collusion.

B) no barriers to entry exist in a monopoly.

C) barriers to exit exist in monopolistic competition.

D) close substitutes are available in monopolistic competition.  

E) firms are price-takers in monopolistic competition.

5) In monopolistic competition

A) there are two firms in the market.

B) the size of one firm is small relative to the size of the industry.

C) the size of one firm is large relative to the size of the industry.

D) each firm is a price-taker.

E) there is only one firm in the market.

 

6) If some firms in the industry make an economic profit, then

A) the industry cannot be perfectly competitive.

B) the industry must be monopolistically competitive.

C) rival firms will enter if there are no barriers to entry.

D) the firms must practice product differentiation.

E) the industry must be an oligopoly.

 

7) A monopolistically competitive firm is able to influence the price of what it sells because of

A) barriers to entry.

B) economies of scale.

C) product differentiation.

D) the fact there are many buyers.

E) inelastic demand.

 

8) In monopolistic competition

A) firms can collude.

B) each firm has a small market share.

C) each firm pays attention to every other firm.

D) firms make a profit in the long run.

E) all of the above.

9) ACME, Inc. operates in a market structure in which there are many other firms that find it easy to enter or exit. ACME is operating in ________ market.

A) definitely a perfectly competitive

B) a perfectly competitive or a monopolistically competitive

C) definitely a monopolistically competitive

D) neither a perfectly competitive nor a monopolistically competitive

E) a monopolistic

 

10) The existence of a large number of firms in monopolistic competition

A) means that each firm has a small market share.

B) makes it possible for each firm's price to deviate by a large amount from the average price of the other firms.

C) means that a firm must pay attention to the behaviour of all of its competitors.

D) All of the above answers are correct.

E) None of the above answers are correct.

 

 

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