Which of the Following Is Not an Assumption of the Theory

question 100

Multiple Choice

Which of the following is not an assumption of the theory of monopolistic competition?

• A)There are high barriers to entry.
• B)There are many sellers and buyers.
• C)Each firm in the industry produces and sells a differentiated product.
• D)The firm is a price searcher.

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Definitions:

Long-Run Aggregate Supply

The total quantity of goods and services an economy can produce when resources are fully employed, assuming constant technology and factors of production.

Labor Force

The total number of people employed and unemployed, seeking employment in an economy.

Technology

The application of scientific knowledge for practical purposes, especially in industry, involving the development and use of technical means and their interrelation with life, society, and the environment.

Stock of Capital

The total quantity of physical assets used in the production of goods and services in an economy.