All of the Following Are Characteristics of Monopolistic Competition EXCEPT

question 7

Multiple Choice

All of the following are characteristics of monopolistic competition EXCEPT:

• A) the use of advertising to differentiate products
• B) a relatively large number of sellers
• C) each seller firm is not particularly concerned about the relationship between its individual actions and those of other firms in the industry.
• D) collusive agreements which lead to the tendency for all firms in an industry to charge approximately the same price for a specific product over long periods of time.
• E) each seller firm attempts to retain or increase its market share by differentiating its product from the output of other firms.

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Definitions:

Noncash Expense

Expenses that do not directly result in a physical outflow of cash but are recorded in the accounting records, such as depreciation.

Depreciation

The methodical distribution of the expense of a physical asset across its lifespan.

Plant Assets

Tangible assets used in a company's operations that have a useful life of more than one year.

Notes Payable

A written agreement to pay a specified amount, usually including interest, by a certain date.