The Demand Curve Facing a Monopolistic Competitor Will Be More

question 171

Multiple Choice

The demand curve facing a monopolistic competitor will be more elastic than the demand curve facing a monopolist because

• A)there are barriers to exit for the monopolist, but not for the monopolistic competitor.
• B)the monopolistic competitor attains resource-allocative efficiency, but the monopolist does not.
• C)there are substitute goods for what the monopolistic competitor produces, but not for what the monopolist produces.
• D)the monopolist is a price searcher, but the monopolistic competitor is not.

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Definitions:

Government Bureaucracies

Complex administrative structures and procedures established by governments to manage their functions and processes.

Profit Motive

The incentive that drives individuals or entities to engage in activities that they expect will yield financial gain.

Special-Interest Groups

Organizations that represent the interests of a specific group of people or industry, often lobbying government officials for policies beneficial to their members.

Rent-Seeking Behavior

Activities aimed at increasing one's share of existing wealth without creating new wealth, often through manipulation of the social or political environment.