A monopoly differs from monopolistic competition in that
A) a monopoly has market power while a firm in monopolistic competition does not have any market power.
B) a monopoly can never make a loss but a firm in monopolistic competition can.
C) in a monopoly there are significant entry barriers but there are low barriers to entry in a monopolistically competitive market structure.
D) a monopoly faces a perfectly inelastic demand curve while a monopolistic competitor faces an elastic demand curve.
Answer: C
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According to the search model, a computerized used car search service should
a. reduce the amount of search b. not affect the amount of search c. increase price dispersion d. reduce price dispersion e. lower the marginal benefit of search
Black Oil Company considered building a service station in a new location. The owners and their accountants decided that this was the profitable thing to do. However, soon after they made this decision, both the interest rate and the cost of building the station changed. In which case do these changes both make it less likely that they will now build the station?
a. Interest rates rise and the cost of building the station rises. b. Interest rates rise and the cost of building the station falls. c. Interest rates fall and the cost of building the station rises. d. Interest rates fall and the cost of building the station falls.
In order to maintain a fixed exchange rate:
A. a country must constantly increase its money supply. B. Maintaining a fixed exchange rate is unrelated to the money supply. C. a country must constantly decrease its money supply. D. a country cannot change its money supply.
Assume the economy has achieved the balanced growth steady state. Explain what factors determine the rates of growth of each of the following variables when balanced growth is achieved: output per effective worker, capital per effective worker, output per worker, output, and consumption per worker
What will be an ideal response?