The Term Monopolistic Competition

question 181

Multiple Choice

The term monopolistic competition

• A)is an alternate expression for monopoly
• B)is used to describe perfect competition with strong entry barriers
• C)denotes an industry with one seller of many differentiated products
• D)denotes an industry with many sellers of homogeneous products
• E)denotes an industry with many sellers of differentiated products

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Definitions:

Total Revenue

The overall amount of money generated by a business from its activities, typically from sales of goods or services before any expenses are deducted.

Marginal Cost Curves

A graphical representation showing how the cost of producing one additional unit of a good changes as production volume changes.

Law of Diminishing Returns

Law of Diminishing Returns states that in a production process, adding an additional factor of production, while holding all others constant, will at some point yield lower per-unit returns.

Sunk Costs

Costs that have already been incurred and cannot be recovered or refunded, and should not influence current or future decisions.