For a Monopolistically Competitive Market, the Number of Firms in the Market

question 4

Multiple Choice

For a monopolistically competitive market, the number of firms in the market implies that

• A) each firm faces a perfectly elastic demand.
• B) all firms will make losses.
• C) each firm acts independently of other firms.
• D) firms will collude to set monopoly price and output.

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Definitions:

Eating Establishments

Businesses that serve food and beverages for consumption by the public, such as restaurants and cafes.

Operational

Referring to the day-to-day activities, processes, and functionalities of a business or organization.

Rate of Interest

The percentage of a sum of money charged for its use, typically expressed as an annual rate.

Account

An arrangement with a financial institution for the deposit and withdrawal of money.