In a Monopolistically Competitive Market

question 121

Multiple Choice

In a monopolistically competitive market:

• A) there are significant barriers to the entry of new sellers.
• B) firms sell differentiated products.
• C) firms face horizontal demand curves.
• D) there are a few producers selling standardized products.

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Definitions:

Average Total Cost

The total cost of production divided by the number of units produced, signifying the cost per unit of output.

Average Fixed Cost

The total fixed costs of production divided by the number of units produced, showing the fixed cost per unit.

Fixed Factor

An input in the production of goods and services that cannot be easily increased or decreased in the short run.

Marginal-cost Schedule

A table or graph showing how the cost of producing one more unit of a good or service varies as the production level changes.