Which of the Following Is False

question 61

Multiple Choice

Which of the following is false?

• A)Long-run equilibrium in monopolistic competition results in zero economic profits.
• B)Monopolistic competitor's demand curves are likely to be more elastic than those of monopolists.
• C)Monopolistic competition results in a greater variety of products than perfect competition.
• D)Monopolistic competition's zero economic profit long-run equilibrium is efficient, like the zero profit equilibrium in perfect competition.
• E)None of the above are false.

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Definitions:

Contestable Markets

Markets where the threat of potential entry by competitors influences the behavior and pricing of existing firms.

Perfectly Competitive

A market structure characterized by a large number of small firms, homogenous products, perfect information, and free entry and exit, leading to price taking behavior.

Five Forces Model

A framework developed by Michael Porter to analyze the level of competition within an industry and business strategy development, which includes the threat of new entrants, the threat of substitutes, the bargaining power of buyers, the bargaining power of suppliers, and competitive rivalry.

Product Differentiation

The process of distinguishing a product or service from others to make it more attractive to a particular target market.