1. Which firm structure must maintain their product differentiation through adve

Question

1. Which firm structure must maintain their product differentiation through advertising A. monopoly B. monoplistic competition C. oligopoly D. perfect competition

2. Marginal revenue is not equal to price when A. goods are differentiated B. barriers to entry are eliminated C. economic profits are zero D. goods are simaliar

3. The price of an oligopoly product is likely to be A. higher than a monopoly firm but lower than a perfectly competitive firm B. higher than a monopoly firm but lower than a monopolistic competitive firm C. lower than a monopoly firm but higher than a monopolistic competitive firm D. higher than a monopoly firm and higher than a petfectly.

4. free entry and exit of firms occurs within which market? A. oligopoly B. monopoly C. monopolistic competition C. all options are correct

5. Monopolies are inefficient because A. a monopoly firm must compete, and competition is expensive B. a monopoly firm will always produce where price is equal to average total cost C. inefficiency is a barrier to entry D. a monopoly firm has no incentive to cut costs

Please explain your answers. Thank you

Explanation / Answer

1. perfect competition because n IB Economics, the imperfectly competitive markets differentiate their products in order to increase their market power and their price-making power. Apple Computer is an example of a company that has successfully differentiated its line of laptop computers in recent years, regularly improving the features of its line of MacBooks to attract consumers away from its competitors and into the world of Macs.

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