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1. The main difference between perfect competition and monopolistic competition

ID: 1100564 • Letter: 1

Question

1. The main difference between perfect competition and monopolistic competition is:

       A. the number of sellers in the market.
       B. the ease of exit from the market.
       C. the difference in the firm's profits in the long run.
       D. the degree of product differentiation.

       A. the ability to prevent transfers among customers in different submarkets
       B. inelastic demand in each submarket
       C. constant marginal costs
       D. identical price elasticities among submarkets

       A. cost minimization
       B. human resource management
      C. complying with government regulations
       D. entrepreneurial

2. Which of the following industries is most likely to represent the Monopolistic competition market structure?        A. The Agriculture industry
       B. Utility Companies
       C. Health food stores
       D. Tobacco products

Explanation / Answer

The ease of exit from the market Tobacco products New firms will enter the market, thereby eliminating economic profit None of the above A form of oligopoly in which firms formally agree to establish a common price, in effect acting like a monopoly. A free vaccination program dumps waste in river upstream from a popular fishing spot Decrease in demand for Y Highest Perfect competition Allocate resources inefficiently Upgrade technology Investment in research and development Ground beef is an inferior good consumers perceive differences among the products of various competitors always earns profits increase total revenue the ability to prevent transfers among customers in different submarkets relying on brand loyalty entrepreneurial