Which of the Following Is Not a Characteristic of a Monopolistically

question 17

Multiple Choice

Which of the following is not a characteristic of a monopolistically competitive market structure?

• A)There is a large number of independently acting small sellers.
• B)All sellers sell products that are differentiated.
• C)There are low barriers to entry of new firms.
• D)Each firm must react to actions of other firms.

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Definitions:

Profitability Index

A financial metric used to measure the relative profitability of an investment, calculated as the present value of future cash flows divided by the initial investment.

Discount Rate

The discount rate utilized in determining the present value of future cash flows through discounted cash flow (DCF) analysis.

NPV

Net Present Value, a method used in capital budgeting to evaluate the profitability of an investment by calculating the present value of expected cash flows minus the initial cost.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.