In a Monopolistically Competitive Market, Having a Large Number of Firms

question 227

Multiple Choice

In a monopolistically competitive market, having a large number of firms in the market means that

• A) no firm attempts to take into account the reaction of rival firms.
• B) individual firms will have a large portion of the market giving them monopoly power.
• C) firms will get together and collude because this will be the only way to earn monopoly profits.
• D) firms will cooperate with each other to drive competitors out of the market.

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Definitions:

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Ideal Conditions

Circumstances or situations that are considered perfect or optimal for a certain process or experiment to occur.

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The extent to which a process or intervention produces a desired effect or outcome with a minimum amount of waste, expense, or unnecessary effort.

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