The Demand Curve in Monopolistic Competition Slopes Downward Because Of

question 29

Multiple Choice

The demand curve in monopolistic competition slopes downward because of:

• A) strong barriers to entry.
• B) product differentiation.
• C) the small number of firms.
• D) government regulation.

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Definitions:

Four-firm Concentration Ratio

A measurement that indicates the combined market share of the four largest firms in an industry, used to assess the degree of competition within the market.

Herfindahl Index

A measure of market concentration that is used to determine the amount of competition among firms within an industry.

Import Competition

The competition between domestic products and foreign products in a domestic market, affecting local industries.

Herfindahl Index

A measure of the concentration of industries or markets, calculated as the sum of the squares of the market shares of the largest firms, used to assess the extent of competition.