The Number of Firms in a Monopolistically Competitive Market Will

question 128

Multiple Choice

The number of firms in a monopolistically competitive market will be smaller if

• A) the market demand curve shifts rightward.
• B) the minimum efficient scale is lower.
• C) fixed costs are smaller.
• D) fixed costs are larger.

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Definitions:

Public Goods

goods that are non-excludable and non-rivalrous, meaning they can be used by everyone simultaneously without diminishing their availability to others.

Market Mechanism

The process by which supply and demand interactions determine prices and quantities of goods and services in an economy.

Voluntary Contributions

Monetary or non-monetary donations made by individuals or organizations to a cause or project without the expectation of direct financial return.

Market-Oriented Economy

A market-oriented economy is one where economic decisions and the pricing of goods and services are guided by the interactions of individuals and businesses in the marketplace.