What Is the Expected Outcome When Trade Occurs in a Monopolistically

question 57

Multiple Choice

What is the expected outcome when trade occurs in a monopolistically competitive industry if the nations have similar tastes, technology, products, and costs?

• A) No trade is possible.
• B) Consumers are left with no choices.
• C) Each firm has a larger market in which to sell, and consumers have more choices of sellers and products.
• D) Transportation costs become the driving factor.

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Definitions:

Investment Account

An account held at a financial institution or brokerage used to hold, manage, and track securities investments and transactions.

Voting Shares

Shares that give the shareholder the right to vote on company matters, such as the election of the board of directors.

Bonds Payable

Long-term liabilities representing money owed by an entity to bondholders, to be repaid at a specified maturity date with interest.

Straight Line Amortization

A method of evenly spreading the cost of an asset over its useful life for accounting and tax purposes.