Which of the Following Is a Characteristic of Monopolistic Competition

question 52

Multiple Choice

Which of the following is a characteristic of monopolistic competition?

• A) Many firms compete for essentially the same customers, but each firm produces a slightly different product.
• B) Competitors have some price-setting power but it is limited because of the many close substitutes available.
• C) Entry is relatively inexpensive.
• D) all of the above

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Definitions:

Maximize

To increase to the greatest possible amount or degree, often used in the context of optimizing outcomes such as profit, efficiency, or utility in various fields.

Total Fixed Cost

The total of all costs that do not change with the level of production or sales activities within a company.

Purely Competitive Market

A market structure characterized by many buyers and sellers, no barriers to entry, and a homogeneous product, leading to the firms being price takers.

Total Cost

The complete amount of costs incurred by a business in the production of goods or services, including both fixed and variable costs.