This Question: 1 pt 20 of 25 (15 complete) This Quiz: 40 pts possible The key ch

Question

This Question: 1 pt 20 of 25 (15 complete) This Quiz: 40 pts possible The key characteristics of a monopolistically competitive industry are: [A] A large number of firms that sell differentiated products that are close substitutes. [B] Firms can easily enter or exit a monopolistically competitive industry [C] Because monopolistically competitive firms can increase their profits if they can successfully distinguish their products from those of their rivals, they have an incentive to engage in sales promotions and advertising. For each of the examples below, indicate which of the above characteristics (A, B or C) is being illustrated There are a number of fast-food restaurants in town, and they compete fiercely. Some restaurants cook their hamburgers over open flames. Others fry their hamburgers. In addition, some serve broiled fish sandwiches, while others serve fried fish sandwiches. A few serve ice cream cones for dessert, while others offer frozen ice cream pies. L(Enter a single letter: A, B, or C.) There is a vast number of colleges and universities across the country. Each competes for top students. Al offer similar courses and programs, but some have better programs in business, while others have stronger programs in the arts and humanities. Still others are academically stronger in the sciences. Enter a single letter A, B, or C.) Enter your answer in each of the answer boxes. lype here to search Esc F2 F3 F4 F5 F6

Explanation / Answer

1) THe answer is A .)

because, here large number of firms sell different good but they are closed susbstitutes to each other. because a hamburgers cook over flame and hmaburger are fried both are closed substitutes .but they are different . therefore it is a characteristic of A.

2) The answer is A -)

because, there are large number of colleges and university which they are offering similar courses and programs but have they have differentiated in types of courses and programs. so the characteristic of large number of firms is selling differntiated good but have closes susbsitute is illustrated in this figure.

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