Which of the Following Statements About the Competitive Environment Is

question 52

Multiple Choice

Which of the following statements about the competitive environment is TRUE?

• A) In monopolistic competition a seller has a down-sloping demand curve due to the lack of any substitute products.
• B) In pure competition, an individual firm is usually faced with a very inelastic demand curve.
• C) Firms in oligopoly should avoid price cutting.
• D) The industry demand curve in oligopoly is usually horizontal.
• E) All of the above.

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Definitions:

Perfect Competition

A market structure characterized by a large number of small firms, homogeneous products, and the free entry and exit of firms, where no single firm can influence the market price.

Mixed Economy

An economy in which production and distribution is done partly by the private sector and partly by the government.

Pure Communism

An idealized form of communism in which there is no need for a state and goods are distributed according to people's needs.

China

The world's most populous country, with a complex economy that is one of the largest globally and a rich cultural history.