Because of the Number of Firms in Monopolistic Competition

question 149

Multiple Choice

Because of the number of firms in monopolistic competition,

• A) each firm has a large market share.
• B) it is possible for the firms to collude.
• C) no one firm can dominate the market.
• D) one firm has the ability to dictate market conditions.
• E) each firm must carefully monitor what its competitors do.

---

Definitions:

Unlevered Cost

The cost of financing a project or investment without the impact of debt, or the cost of capital for a company with no debt.

Cost of Equity

The rate of return a company is expected to pay to its shareholders for their investment in the company's equity, often estimated using the Capital Asset Pricing Model (CAPM).