The Use of the Word "Competition" in the Name of the Market

question 11

Multiple Choice

The use of the word "competition" in the name of the market structure called "monopolistic competition" refers to the fact that

• A) There are many sellers in a monopolistically competitive market and there is free entry and exit in the market just like a competitive market.
• B) Monopolistically competitive firms face a downward-sloping demand curve just like competitive firms.
• C) Monopolistically competitive firms charge prices equal to the minimum of their average total cost just like competitive firms.
• D) The products are differentiated in a monopolistically competitive market just like in a competitive market.

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Definitions:

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Sigmund Freud, an Austrian neurologist and the founder of psychoanalysis, known for his theories on the unconscious mind and the development of psychosexual stages.

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