Monopolistic Competition Is Similar to Monopoly in That

question 49

Multiple Choice

Monopolistic competition is similar to monopoly in that:

• A) firms face perfectly elastic demand curves.
• B) firms sell products for which there are no close substitutes.
• C) there is relatively free entry and exit.
• D) firms have some influence over the product price.

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Definitions:

Capital Goods

Long-lasting goods that are used in the production of other goods and services, such as machinery, buildings, and equipment.

Loanable Funds

The money available for borrowing in the financial markets, comprising savings by households and businesses that can be loaned to others who seek to invest or spend more than their current income.

Loanable Funds

Money available for borrowing in the financial markets.

Government Budget Deficits

A situation where government expenditures exceed its revenues in a given fiscal period, leading to borrowing or spending cuts.