What Condition May Provide for a Relatively Small Degree of Inefficiency

question 58

Multiple Choice

What condition may provide for a relatively small degree of inefficiency under monopolistic competition?

• A) There is a single seller and no product differentiation.
• B) The marginal cost of production is less than the market price.
• C) The demand curve is relatively elastic so that the price is near the long-run minimum average cost.
• D) There is only one buyer in the market.

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Definitions:

Benzene

A cyclic hydrocarbon with the formula C6H6, characterized by a ring of six carbon atoms connected by alternating double and single bonds.

Bromination

A chemical reaction that involves the addition of bromine to organic compounds, often used to test for unsaturation.

Major Organic Product

In a chemical reaction, it refers to the predominant outcome or compound produced in the highest amount compared to any side products.

Activating Power

Refers to the ability of a group attached to a benzene ring to increase its reactivity towards electrophilic aromatic substitution by making the ring electrons more available.