Because of One Assumption in the Theory of Monopolistic Competition

question 172

Multiple Choice

Because of one assumption in the theory of monopolistic competition, the excess capacity theorem exists. What is the assumption?

• A)There are many sellers and buyers.
• B)Each firm produces and sells a slightly differentiated product.
• C)There is easy entry into the industry.
• D)There is easy exit from the industry.

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Definitions:

Representative Sample

A representative sample is a subset of a population that accurately reflects the members of the entire population, used in statistical analysis to make inferences about the population.

Experimental Method

A research methodology that involves manipulating variables to test hypotheses and observe effects.

Spurious Relationship

A statistical association between two variables that appears to be causally linked but is actually due to a third variable or a coincidence.

Quantitative Research

Research methodology that focuses on gathering and analyzing numerical data to identify patterns, correlations, and cause-effect relationships.