Which of the following is not a requirement for the existence of monopolistic competition in a market?
A. Numerous small sellers
B. Full information about the market among buyers and sellers
C. Product homogeneity
D. Freedom of entry into the market
Answer: C
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Before the policy was put into effect, estimated consumer surplus (in thousands of dollars) was valued at
A collaborative federal and state program has been proposed in response to acid rain damagein Newport Bay, Maryland. To estimate the incremental benefits of the program, you use thetravel cost methodbasedupon the following pre- and post-policy recreational demand functions: Pre-policy: P = 62 – 0.02V1 Post-policy: P = 80 – 0.02V2, where V is the number of visitors (in thousands) and P is the admission fee. Assume the admission fee is set at $20 per visitor. a. 2,100 b. 44,100 c. 90,000 d. 45,900
The producer surplus of making and selling 10 chairs is found by
A) multiplying the selling price by 10. B) subtracting the marginal cost from the selling price for each chair and summing the differences for all 10 chairs. C) subtracting from the total revenue the cost of producing one chair multiplied by 10. D) adding the marginal cost and the price of all 10 chairs. E) None of the above answers is correct.
If a monopolist wishes to increase its output and quantity sold
A) it must reduce its price, so its marginal revenue is greater than its price. B) it must reduce its price, so its marginal revenue is less than its price. C) it must raise its price, so its marginal revenue is greater than its price. D) it must raise its price, so its marginal revenue is less than its price.
Which of the following is the main reason for externalities?
A) The full cost of a transaction is not borne by the buyer/seller of the product. B) Police enforcement of scalping is not uniformly enforced. C) the lack of organized exchanges for all goods and services D) The production of public goods uses up scarce resources.