A Monopolistic Competitive Firm Differentiates Its Product (From Similar Products)

question 170

Multiple Choice

A monopolistic competitive firm differentiates its product (from similar products) in the minds of the buying public. As a result, the firm

• A)may earn positive economic profits, even with easy entry into the industry.
• B)will definitely earn positive economic profits.
• C)will be able to lower its costs below that of its competitors.
• D)finds that its fixed costs are sunk costs.
• E)a and c

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Definitions:

Lower-order Needs

Basic human necessities such as food, water, and safety, which are foundational before higher-level needs can be pursued, according to Maslow's hierarchy.

High Need

A strong requirement or desire for something, which can drive behavior and motivation in both personal and professional contexts.

Maslow's Hierarchy

A theory in psychology proposed by Abraham Maslow that outlines a hierarchy of human needs, from basic physiological needs to self-actualization, suggesting that higher needs can only be pursued once foundational ones are met.

Physiological Needs

Basic requirements for human survival, such as food, water, shelter, and clothing, which are the foundation of Maslow's Hierarchy of Needs.