It is more difficult to analyze a monopolistically competitive market than a perfectly competitive market because in a monopolistically competitive market:
A) products are differentiated, which results in nonprice competition.
B) a normal profit in the long run is normal.
C) there is only one firm.
D) firms are characterized by mutual interdependence.
Answer: A) products are differentiated, which results in nonprice competition.
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Identify the largest and smallest components of GDP
A currency board is set up to:
a. manage free-floating currencies. b. gradually eliminate currency pegs. c. give a peg added durability. d. immediately eliminate currency pegs.
When an economy is producing its potential output, which of the following is true?
What will be an ideal response?
Refer to Figure 5.2, which shows a family of average cost curves. Why does the vertical distance between Curve 1 and Curve 2 decrease as output increases from Q1 to Q2?
A. Because average variable cost first decreases, then increases as output increases from Q1 to Q2. B. Because average fixed cost decreases as output increases from Q1 to Q2. C. Because average total cost first decreases, then increases as output increases from Q1 to Q2. D. Because average variable cost increases faster than average fixed cost as output level approaches Q2.