Which of the Following Is a Characteristic of a Monopolistically

question 18

Multiple Choice

Which of the following is a characteristic of a monopolistically competitive firm as opposed to a monopoly firm?

• A)Monopolistically competitive firms make positive economic profit in the long-run unlike monopoly firms.
• B)Monopolistically competitive firms face downward sloping demand curves unlike monopoly firms.
• C)Monopolistically competitive firms do not face entry barriers unlike monopoly firms.
• D)Monopolistically competitive firms produce goods that have no substitutes unlike monopoly firms.
• E)Monopolistically competitive firms produce at the level where marginal revenue equals marginal cost unlike monopoly firms.

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Definitions:

Mixed Strategy

A strategy in decision-making or game theory where a player employs a combination of actions or choices to ensure diversity or unpredictability.

Pure Chase Strategy

A demand matching or production strategy where output is adjusted to match the demand exactly, with no inventory buffer.

Demand Requirements

The specific quantities of products or services that a market or customer base needs over a particular period.

Pure Level Strategy

A production strategy where the output levels are kept constant despite fluctuating demand, aiming at minimizing changes in production rates.