Which of the Following Is True of Monopolistically Competitive Markets

question 70

Multiple Choice

Which of the following is true of monopolistically competitive markets?

• A)The economic profits of firms in a monopolistically competitive market are positive in the long run.
• B)The cost of government regulation is small relative to the social losses from monopolistic competition.
• C)Since the price and output combination in a monopolistically competitive market is efficient,there is no need for government regulation.
• D)It is possible that the value created through product differentiation outweighs the efficiency loss from monopolistic competition.

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Definitions:

Experimental Approach

A method of research in which variables are manipulated to observe effects on other variables, often used to determine cause-and-effect relationships.

Correlational Approach

A research method that examines the relationship between two or more variables to determine if they are associated, without inferring causality.

Physiological Recording

The measurement and recording of physical or biological responses, such as heart rate, muscle tension, brain activity, and other bodily functions.

Statistical Procedures

A set of methods used to collect, analyze, interpret, and present data in a meaningful way.