One Characteristic of Monopolistic Competition Is That It Has

question 17

Multiple Choice

One characteristic of monopolistic competition is that it has

• A) many firms producing a slightly differentiated product.
• B) many firms producing identical goods.
• C) one firm producing a unique good.
• D) a few firms producing a slightly differentiated product.
• E) large barriers to entry.

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Definitions:

Diseconomies of Scale

A phenomenon where an increase in production leads to higher average costs per unit due to inefficiencies, often occurring when companies become too large.

Average Total Cost

The total cost per unit of output, calculated by dividing the total cost of production by the number of units produced.

Marginal Cost Curve

A graph that shows the change in the total cost of producing one additional unit of a good or service.

Diminishing Marginal Product

The principle that as additional units of a variable input are added to a fixed input, the additional output produced from each new unit decreases.