Which of the following is NOT a characteristic of a monopolistically competitive market?
A. There is only one firm selling a product.
B. There are many firms selling products that are similar but not identical.
C. There are many firms that have some control over price.
D. There are no artificial barriers to entry.
Answer: A
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In a market with asymmetric information, a good is said to have hidden characteristics if:
A) the consumption of the good imposes an additional cost on the society. B) the production of the good generates additional benefits to the society. C) the seller offers secret discounts to some buyers. D) the buyer or the seller observes something about the good that the other does not.
Risk averse people
A) will never hold bonds denominated in several different currencies because of transaction costs. B) will always hold bonds denominated in several different currencies because of transaction costs. C) may hold bonds denominated in several different currencies. D) may hold bonds denominated in several different currencies only if satisfying the well known interest party condition. E) will hold only domestic bonds because of the home bias effect.
The demand curve faced by a monopolist is
a. perfectly elastic b. perfectly inelastic c. undefined d. the market demand curve e. the sum of the demand curves for perfectly competitive firms in a similar industry
The buying and selling of foreign currency by the central bank is a trade policy whose objective is:
A. reducing purchases of assets abroad. B. stabilizing the exchange rate against external shocks. C. stabilizing the interest rate against foreign capital outflows. D. promoting long term economic growth.