In Both Monopolistic Competition and Oligopoly Markets

question 2

Multiple Choice

In both monopolistic competition and oligopoly markets:

• A) there is easy entry and exit.
• B) consumers perceive differences among the products of various competitors.
• C) economic profits may be earned in the long run.
• D) there are many sellers.

---

Definitions:

Information Surprises

Events or news that were unexpected by market participants, often leading to sudden changes in asset prices.

Nondiversifiable Risk

The portion of investment risk that cannot be eliminated through diversification, attributed to market factors affecting all investments.

Inflation

The upward movement in the general price index of goods and services, which diminishes the purchasing ability.

Total Return

The overall financial gain or loss on an investment over a specific period, including dividends, interest, and capital gains.