Which of the following is an example of monopolistic competition?
a) One firm supplies 60 percent of the product to the market and there are three other rival firms
b) Two firms supply the entire market
c) Many firms supply similar products, each with some consumers who show significant brand loyalty
d) One large firm supplies the entire market
Answer: c) Many firms supply similar products, each with some consumers who show significant brand loyalty
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An export good is a good produced
A) in the United States and sold in other countries. B) in the United States and sold to foreigners living in the United States. C) in another country and purchased by U.S. residents. D) by foreigners in the United States and purchased by U.S. households. E) in another country and purchased by foreigners not residing in the United States.
Import quotas
A) are the same as tariffs. B) set the maximum quantity of a good that can be imported. C) are not used by the United States. D) set the minimum percentage of the value of a product that must consist of imported components.
The concept of economic rent applies to
A. all wage and salary earners. B. no wage or salary earners. C. only owners of real estate. D. people with rare valuable skills.
If a profit-maximizing, perfectly competitive firm is making only a normal profit in the short run, then the firm is in:
a. disequilibrium. b. equilibrium where MR exceeds minimum ATC. c. equilibrium where MR equals minimum AVC. d. equilibrium where P = AFC. e. equilibrium where P = ATC