Which of the Following Statements Is True About Monopolistically Competitive

question 27

Multiple Choice

Which of the following statements is true about monopolistically competitive firms?

• A) Unlike perfectly competitive firms, monopolistically competitive firms are able to raise their prices without losing all of their customers.
• B) Like perfectly competitive firms, monopolistically competitive firms are not able to raise prices without losing all of their customers because they face competition from firms selling similar products.
• C) Like perfectly competitive firms, monopolistically competitive firms maximize their profits by settling price equal to marginal cost.
• D) Unlike perfectly competitive firms, monopolistically competitive face perfectly inelastic demand curves.

---

Definitions:

Operant Process

The method by which behaviors are modified through the consequences of those behaviors, emphasizing reinforcement and punishment.

Negative Reinforcement

A concept in behavioral psychology where the removal of an unpleasant stimulus in response to a desired behavior increases the likelihood of that behavior being repeated in the future.

Aversive Punishment

A form of behavior modification that involves presenting an unpleasant stimulus to decrease the likelihood of a behavior's recurrence.

Negative Reinforcement

The removal of an unpleasant stimulus to increase the likelihood of a behavior being repeated.