Which of the Following Statement(s) Is/are TRUE

question 37

Multiple Choice

Which of the following statement(s) is/are TRUE?
I. Because monopolistically competitive firms sell differentiated products, their demand curves are downward sloping.
II. Monopolistically competitive firms earn above-normal profits because of high entry barriers.
III. As firms enter a monopolistically competitive industry, the demand curves of the existing firms shift down and to the left.

• A) I and III only
• B) I and II only
• C) II only
• D) III only

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Definitions:

Sensory Adaptation

The process by which sensory receptors become less sensitive to constant stimuli over time.

High-Volume

Describes a large quantity or amount, often used in the context of sales, production, or activity levels.

Weber's Law

A principle stating that the smallest noticeable difference in stimulus intensity is proportional to the intensity of the initial stimulus.

Accommodation

In psychology, the process of adjusting pre-existing schemas or ideas in response to new information or experiences; in vision, the process by which the eye's lens changes shape to focus near or far objects on the retina.