It Is True in Both Monopolistically Competitive and Perfectly Competitive

question 195

Multiple Choice

It is true in both monopolistically competitive and perfectly competitive industries that

• A)firms produce products for which there are no close substitutes.
• B)there are high barriers to entry.
• C)there are many buyers and sellers.
• D)firms are price takers.

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Definitions:

Price Floor

A minimum price set by the government or a regulatory body, below which a good or service cannot be sold in the market.

Compact Discs

Optical discs used to store digital data, primarily known for storing music recordings in a digitally encoded format.

Surplus

A condition in which the amount of a good offered for sale by producers is greater than the amount that buyers will purchase at the existing price. A decline in price would eliminate the surplus.

Waiting In Line

This concept relates to the experience of standing or waiting in a sequence for services or goods, often analyzed in queue theory.