A Monopolistically Competitive Firm Is Like an Oligopolistic Firm Insofar

question 74

Multiple Choice

A monopolistically competitive firm is like an oligopolistic firm insofar as

• A)both face perfectly elastic demand.
• B)both can earn an economic profit in the long run.
• C)both have MR curves that lie beneath their demand curves.
• D)neither is protected by high barriers to entry.
• E)both are price takers.

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Definitions:

Second-Bidder

Refers to the auction bidder with the second-highest bid, often relevant in Vickrey auctions where this bidder's price determines the sale price.

Vickrey Auction

A sealed-bid auction where the highest bidder wins but pays the second-highest bid, encouraging true value bids.

English Auction

A type of auction where the price ascends and participants openly bid against each other, with the highest bid at the close of the auction winning.

Reservation Price

The utmost price a buyer is ready to offer for a good or service.