All of the Following Characteristics Are Common to Both Monopolistic

question 233

Multiple Choice

All of the following characteristics are common to both monopolistic competition and perfect competition except

• A)firms act to maximize profit.
• B)entry barriers into the industries are low.
• C)the market demand curves are downward-sloping.
• D)firms take market prices as given.

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Definitions:

Goodwill

A non-physical asset that is recognized when one business buys another at a cost exceeding the fair market value of its net recognizable assets.

Goodwill

An intangible asset that represents the premium paid over the fair value of the net identifiable assets of a company during an acquisition.

Initial Value Method

An accounting method used to record investments at their acquisition cost.