QUESTION 25 Monopolistic competition is an industry characterized by a: small nu

Question

QUESTION 25

Monopolistic competition is an industry characterized by a:

small number of firms producing similar products, with relatively easy entry for firms.

large number of firms producing identical products, with relatively easy entry for firms.

large number of firms producing similar products, with relatively easy entry for firms.

D small number of firms producing identical products, with barriers to entry for firms.

Q:

If the toothpaste market is monopolistically competitive, product differentiation will take place in which of the following forms?

different varieties of toothpaste—including whitening agents

differentiation in the locations where certain toothpastes are available

quality differences among the various brands

all of these forms

Question:

QUESTION 23

Suppose that you build a high-speed, magnetically powered transportation system from New York to Los Angeles. High fixed costs resulting from the enormous quantity of capital used in this system enable decreasing average cost for any conceivable level of demand. Your monopoly would result from:

control of a scarce resource or input.

increasing returns to scale.

government-created barriers.

technological superiority

A.

small number of firms producing similar products, with relatively easy entry for firms.

B.

large number of firms producing identical products, with relatively easy entry for firms.

C.

large number of firms producing similar products, with relatively easy entry for firms.

.

D small number of firms producing identical products, with barriers to entry for firms.

Q:

If the toothpaste market is monopolistically competitive, product differentiation will take place in which of the following forms?

A.

different varieties of toothpaste—including whitening agents

B.

differentiation in the locations where certain toothpastes are available

C.

quality differences among the various brands

D.

all of these forms

Question:

QUESTION 23

Suppose that you build a high-speed, magnetically powered transportation system from New York to Los Angeles. High fixed costs resulting from the enormous quantity of capital used in this system enable decreasing average cost for any conceivable level of demand. Your monopoly would result from:

A.

control of a scarce resource or input.

B.

increasing returns to scale.

C.

government-created barriers.

D.

technological superiority

Explanation / Answer

Monopolistic competition is an industry characterized by a:

C.

Large number of firms producing similar products, with relatively easy entry for firms.

Monopolistic Competition, there are a large number of firms that produce differentiated products which are close substitutes for each other.

If the toothpaste market is monopolistically competitive, product differentiation will take place in which of the following forms?

D.

all of these forms

This is one of the features of the firms under the monopolistic competition that produces the product which is not identical but is slightly different from each other.

The changes could be in the form of new design, better quality, new packages or container, better materials, etc.

Suppose that you build a high-speed, magnetically powered transportation system from New York to Los Angeles. High fixed costs resulting from the enormous quantity of capital used in this system enable decreasing average cost for any conceivable level of demand. Your monopoly would result from:

B.

Increasing returns to scale.

Decrease in the average cost happens due to economies to scale. This is the reason why there is an increasing returns to scale.

C.

Large number of firms producing similar products, with relatively easy entry for firms.

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