Which of the Following Is Not True of Monopolistic Competition

question 24

Multiple Choice

Which of the following is not true of monopolistic competition?

• A)There are a large number of buyers and sellers.
• B)The firms produce differentiated products.
• C)There exists free entry and exit of firms.
• D)Each of the firms faces a horizontal demand curve.
• E)Each of the firms act as a minimonopoly in the market.

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Definitions:

Patented Technologies

Innovations protected by legal rights, granting the patent holder exclusive use and commercial benefits.

High Capital Requirements

The need for significant financial investment to start or maintain operations in certain industries or business activities.

Limited Distribution Channels

A situation where a product or service has a small number of outlets or platforms through which it can reach customers.

Industry Analysis

An examination of the economic and market forces that affect the competitiveness within an industry.