Which of the Following Are Characteristic of a Monopolistically Competitive

question 60

Multiple Choice

Which of the following are characteristic of a monopolistically competitive market?

• A) Economic profits are often positive in the long run.
• B) All firms are price takers.
• C) There are many small firms in the industry.
• D) Each firm faces a horizontal demand curve.
• E) Firms engage in strategic behaviour.

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Definitions:

Broadly Held Corporation

A corporation with a large number of shareholders, distributing ownership across a wide array of investors.

Closely Held Corporation

A type of corporation that has a limited number of shareholders and does not offer its shares for sale to the general public, often family-owned or controlled by a small group of investors.

Determination

The process of making a firm decision or settling a matter with conclusiveness.

Business Organization

The structure and legal form under which a business operates, such as a corporation, partnership, or sole proprietorship.