In Which of the Following Market Structures Does Free Entry

question 494

Multiple Choice

In which of the following market structures does free entry and exit play an important role in the long-run equilibrium outcome?
(i) perfect competition
(ii) monopolistic competition
(iii) monopoly

• A)(i) only
• B)(i) and (ii) only
• C)(ii) and (iii) only
• D)(i), (ii), and (iii)

---

Definitions:

Fixed-rate

Refers to an interest rate that remains constant over the duration of the loan, bond, mortgage, or other financial instrument.

Sub-prime Mortgages

Loans offered to individuals with poorer credit histories or a higher risk of defaulting, usually at higher interest rates.

Fannie Mae

A government-sponsored enterprise (GSE) focused on expanding the secondary mortgage market by securitizing mortgages, enhancing liquidity in the financial system.

Freddie Mac

A public government-sponsored enterprise aimed at expanding the secondary mortgage market by buying loans from lenders.