If One Were to Discuss Why the Term "Monopolistic Competition

question 138

Multiple Choice

If one were to discuss why the term "monopolistic competition" is used,the best description would be that the industry is "monopolistic" because it

• A) has high barriers to entry,but is "competitive" because it has many firms.
• B) has low barriers to entry,but is "competitive" because it has few firms.
• C) has product differentiation,but is "competitive" because it has many firms.
• D) has a monopoly,but is "competitive" because there are low barriers to entry,meaning it has potential rivals.
• E) holds patents,but is "competitive" because other firms might invent similar patentable products.

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Definitions:

Disposable Incomes

The financial sum available for households to spend and put aside for savings after income tax reductions.

Productivity Growth

An improvement in production effectiveness, characterized by the quantity of goods and services generated per unit of labor, capital, or other resources.

Liquid Assets

Assets that can be quickly converted into cash with little to no loss in value.

Credit Available

The amount of credit that a financial institution extends to a client, which the client has not yet used.