Because of the Number of Firms in Monopolistic Competition

question 149

Multiple Choice

Because of the number of firms in monopolistic competition,

• A) each firm has a large market share.
• B) it is possible for the firms to collude.
• C) no one firm can dominate the market.
• D) one firm has the ability to dictate market conditions.
• E) each firm must carefully monitor what its competitors do.

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Definitions:

Merchandise Inventory

The goods a company holds for the purpose of resale to customers.

Customer Refunds Payable

A liability account for estimated refunds and allowances that will be paid or granted customers in the future.

Merchandise Returns

Goods returned by the buyer to the seller, often due to defects, wrong size, or dissatisfaction.

Purchase Discounts

A deduction from the original purchase price allowed by the seller to the buyer, typically for early payment or bulk purchasing.