Which of the following most closely approximates the conditions of a monopolistically competitive market?
a. The market for Grade A eggs, which is characterized by a large number of firms producing a homogeneous product.
b. The restaurant industry, which is characterized by firms producing a differentiated product in a market with low entry barriers.
c. Local cable television service, where a licensed supplier competes with firms offering satellite service.
d. The market for jumbo aircraft, where one major domestic firm competes with one major foreign firm.
b
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Which statement is false?
A. Throughout the 1980s, the Soviet Union devoted most of its capital and talent to its military establishment rather than to market reform. B. In the late 1970s, China began reforms, which eventually transformed it to a more market-oriented economy. C. Russia has been more successful than China in becoming a market-oriented economy. D. None of these statements are false.
The main source of government funding is
A. transfer payments. B. borrowing. C. taxes. D. interest earned from holding bonds.
The above figure shows the market for a particular good. If the market is controlled by a perfect-price-discriminating monopoly, compared to a perfectly competitive market, the change in producer surplus is
A) B + C. B) D + E. C) A + B + C. D) A + B + C + D + E.
Internalizing an externality makes _____
a. consumers pay a price that is equal to their private willingness to pay b. producers charge a price that is equal to the marginal cost of production faced by them c. the government tax a third party who has been affected by the externality d. market participants consider the costs of or benefits to other parties while making decisions