A Monopolistically Competitive Industry Combines Elements of Both Competition and Monopoly

question 33

Multiple Choice

A monopolistically competitive industry combines elements of both competition and monopoly. It is correct to say that the competitive element results from

• A) a relatively large number of firms, and the monopolistic element from product differentiation.
• B) product differentiation, and the monopolistic element from high entry barriers.
• C) a perfectly elastic demand curve, and the monopolistic element from low entry barriers.
• D) a highly inelastic demand curve, and the monopolistic element from advertising and product promotion.

---

Definitions:

TRIN Ratio

A technical analysis indicator that compares advancing and declining stock issues and volume to assess market sentiment.

Market Breadth

An indicator used to gauge the direction of the overall stock market by analyzing the number of companies advancing versus those declining.

50-day Moving Average

A technical analysis indicator that represents the average closing price of a security over the most recent 50-day period, used to gauge short-term price trends.

Healthcare Index

A stock market index that measures the performance of the healthcare sector, including pharmaceuticals, hospitals, medical technology companies, etc.