Bigness, or Large Firms, May Benefit Consumers in Which of the Following

question 120

Multiple Choice

Bigness, or large firms, may benefit consumers in which of the following ways?

• A)Larger firms usually charge lower prices than smaller firms.
• B)Larger firms with monopoly power definitely have greater incentive to be efficient and innovative.
• C)Larger firms may take advantage of economies of scale and scope.
• D)Larger firms are more responsive to consumers' desires.

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Definitions:

Monopolistic Competition

A market structure characterized by many firms offering products that are similar but not identical, leading to competition based on product differentiation, prices, and marketing.

Perfect Competition

A market structure characterized by a large number of sellers and buyers, homogeneous products, and no barriers to entry or exit.

Product Differentiation

A marketing strategy that businesses use to distinguish their product from similar offerings on the market.

Perfect Competition

A market structure characterized by many firms, freedom of entry and exit, homogeneous products, and perfect knowledge, leading to price taking behavior.