In Monopolistic Competition

question 246

Multiple Choice

In monopolistic competition:

• A) Each firm's price cannot deviate from the average price of other firms.
• B) Each firm supplies a small part of the total market output.
• C) One firm's actions directly affect the actions of the other firms.
• D) Collusion is possible.

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Definitions:

Polarisation

The division into two sharply contrasting groups or sets of opinions or beliefs.

Outgroup

Any group that an individual does not belong to or identify with, often perceived as fundamentally different or alien.

Diffusion

The process by which an innovation, idea, or cultural practice is spread through a population, crossing barriers and gaining acceptance.

Groupthink

A psychological phenomenon that occurs within a group of people, in which the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.