Which of the Following Properly Describes Monopolistic Competition

question 41

Multiple Choice

Which of the following properly describes monopolistic competition?

• A)All firms produce exactly the same product.
• B)There are only a few firms.
• C)The industry is highly regulated.
• D)Each firm faces a downward-sloping demand curve.
• E)The cost curves of the typical firm are horizontal.

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Definitions:

Profits

The financial gain achieved when the revenue from business activities exceeds the costs and expenses involved in operating.

Market Economy

An economic system where the prices of goods and services are determined in a free price system, set by supply and demand.

Efficient

Pertaining to a system or process that operates in a way that maximizes output with minimal waste, effort, or expense.

Resources

Assets, materials, and inputs needed for the production of goods and services, including natural resources, human resources, and capital.