One Prediction About Monopolistic Competition Is That It Has Higher

question 80

Multiple Choice

One prediction about monopolistic competition is that it has higher unit costs than perfect competition.But it is unreasonable to conclude that monopolistic competition is therefore bad for consumers because

• A)consumers benefit from lower prices.
• B)consumers benefit from an increased variety of products.
• C)consumers benefit because of an increase in quantity available.
• D)consumers benefit from products becoming more homogeneous.
• E)higher production costs means more employment.

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Definitions:

Fair Value

An estimate of the price at which an asset would trade in a fair transaction between willing market participants, reflecting its intrinsic value.

Year-end Adjustment

Financial adjustments made at the end of the accounting year to reflect accurate and up-to-date information in financial statements.

Stock Investment

The act of purchasing equity shares in a company with the expectation of earning dividends or selling the shares at a higher price for profit.

Insignificant Influence

Refers to a situation where an investor does not have the power to govern the financial and operating policies of an investee, leading to no significant impact on the financial outcomes of the investee.