Which of the Following Is Not a Characteristic of Monopolistic

question 1

Multiple Choice

Which of the following is not a characteristic of monopolistic competition?

• A)The market is fragmented.
• B)There is free entry and exit.
• C)In the long-run equilibrium, firms earn positive profits.
• D)Firms produce horizontally differentiated products.

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Definitions:

Transfer Price

The price at which goods and services are sold between divisions within the same company or between subsidiaries and the parent company, for internal transactions.

Consolidated Cost

The total cost that combines figures from a parent company and its subsidiaries, reflecting the overall expenses incurred and eliminating intercompany transactions.

Normal Markup

The standard increase over cost that a business applies to its products or services to determine the selling price.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and a claim on a proportion of its profits.