A Market Situation in Which a Large Number of Firms

question 20

Multiple Choice

A market situation in which a large number of firms produce similar but not identical products is

• A) a collusive market structure.
• B) competitive monopoly.
• C) a homogeneous market.
• D) monopolistic competition.

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Definitions:

Monopolistic Competitor

A firm operating in a market structure where many companies sell products that are similar but not identical, allowing for some degree of market power and price setting.

Excess Capacity

A situation in which a company can produce more goods or services than currently demanded, due to underused resources.

Economic Profit

Profit calculated by subtracting both explicit and implicit costs from total revenues, indicating the efficiency beyond the breakeven point.

Capital-Intensive

Describing industries or processes that require a high level of capital investment in machinery and equipment relative to labor.