n monopolistic competition, a There are sellers which one of the following is NO
ID: 1109807 • Letter: N
Question
n monopolistic competition, a There are sellers which one of the following is NOT true? D Entry is relatively easy but not as easy as inct any selers but fewer than under competition d Sellers have some control over price mogeneous 17. Compared to a monopolyin a perfectly competitive a. Price is lower and quantity is higher b. Both price and quantity are lower c. Both price and quantity are higher d. Price is higher and quantity is lower 18. The demand curve faced by a monopolist is: a. Perfectly inelastic b. Perfectly elastic c. Same as the market demand curve d. Different than the market demand curve 19. As we move from perfect competition to monopolistic competition to oligopoly to monopoly entry into and exit from the market becomes: a. More difficult b. Less difficult C. More difficult in some and less difficult in other market structures d. Dependents on the economic situation in the country 20. Number of sellers in an oligopoly market are: a. Many b. Few and relatively large in size c. One d. Two. 21. Assume that a firm is operating in a perfectly competitive market at its break-even level of output. Which of the following statements is false? a. marginal cost and average revenue are equal b. marginal cost and marginal revenue are equal c. marginal cost and average variable cost are equal d. marginal cost and average total cost are equal. 22. Which of the following are common barriers to entry in the market? a. economies of scale b. absolute unit-cost advantages c. capital access and costs d. all of the above. 23. Compared to prices in perfect competition, prices in oligopoly are: a. less stable b. more stable c. have similar fluctuations d. none of the above.Explanation / Answer
16) Option C
Products are differentiated and this gives firms some control over the price. They can earn significant profit out of this feature
17) Option A
This is because in a monopoly production decision is taken by MR = MC while in competition, it is P = MC. Hence price is low and quantity is higher
18) Option C
This is because it is the only seller in the market so it faces and caters entire market
19) Option A
There is no entry in monopoly and free and exit in competition
20) Option B
Oligopoly has fewer firms but all have significant market shares
21) Option D
Break even implies P = ATC. Since normally P = MC in competition, it will be correct that P = MC = ATC
22) Option D
These are all barriers which restricts entry
23) Option A
Prices are stable in competition because there is no fluctuation in short run.
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