Which of the Following Is True About Monopolistic Competition but False

question 27

Multiple Choice

Which of the following is true about monopolistic competition but false about perfect competition?

• A) There are a large number of independently acting sellers.
• B) There are no barriers to entry.
• C) Firms can make an economic profit in the short run.
• D) Firms compete on their product's price as well as its quality and marketing.
• E) Firms cannot make an economic profit in the long run.

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Definitions:

Straight-Line Method

A method of calculating depreciation or amortization by evenly spreading the cost of an asset over its useful life.

Interest Semiannually

A payment structure for bonds or loans where interest payments are made twice a year.

Market Rate

The prevailing interest rate available in the marketplace for securities or loans.

Debt-To-Equity Ratio

A financial ratio that assesses how a company's assets are financed through debt and equity.