ECONOMICS Chapter 13 Study Set QUESTION AND CORRECT ANSWER

ECONOMICS Chapter 13 Study Set QUESTION AND CORRECT ANSWER Monopolistic competition means: a market situation where competition is based entirely on product differentiation and advertising. a large number of firms producing a standardized or homogeneous product. many firms producing differentiated products. a few firms producing a standardized or homogeneous product. many firms producing differentiated products. Monopolistic competition is characterized by a: few dominant firms and low entry barriers. large number of firms and substantial entry barriers. large number of firms and low entry barriers. few dominant firms and substantial entry barriers. large number of firms and substantial entry barriers. Under monopolistic competition, entry to the industry is: completely free of barriers. as difficult as under pure monopoly. more difficult than under pure monopoly. blocked. more difficult than under pure competition but not nearly Which of the following is not a basic characteristic of monopolistic competition? The use of trademarks and brand names. Recognized mutual interdependence. Product differentiation. A relatively large number of sellers. Recognized mutual interdependence. A monopolistically competitive industry combines elements of both competition and monopoly. The monopoly element results from: the likelihood of collusion. high entry barriers. product differentiation. mutual interdependence in decision making. product differentiation. The monopolistic competition model assumes that: allocative efficiency will be achieve