The Number of Firms in a Monopolistically Competitive Market Means

question 297

Multiple Choice

The number of firms in a monopolistically competitive market means that

• A) all firms will have substantial monopoly power since there are so few firms in the industry.
• B) each firm has a relatively small share of the total market since there are many firms in the industry.
• C) the firms will be likely to collude since there are only a few firms in the industry.
• D) firms will have a hard time earning non-negative profits since there are many firms in the industry.

---

Definitions:

Motion Parallax

A depth cue in which objects closer move faster across the field of view than those farther away, giving a sense of depth.

Linear Perspective

A depth cue in which parallel lines converge as they recede into the distance, aiding in the perception of depth.

Persistence of Vision

The phenomenon where an image continues to appear in one's vision after the exposure to the original image has ceased, underlying the principle of motion pictures.

Bottom-up Processing

An approach to information processing that starts with the sensory input and builds up to the final perception in a step-wise fashion.