20. Which demand curve would best represent a monopolistic competitor? A. D1 B.
ID: 1207250 • Letter: 2
Question
20. Which demand curve would best represent a monopolistic competitor?
A. D1
B. D2
C. D3
D. None of these curves represent a monopolistic competitor.
21. If demand curve D2 represents a monopolistic competitor and demand curve D3 represents a monopoly, then
A. the monopolist has a more elastic demand curve than the monopolistic competitor.
B. the monopolistic competitor has a more elastic demand curve than the monopolist.
C. the monopolist and the monopolistic competitor have identical elasticity in their demand curves.
D. None of these choices are true.
22. If demand curve D2 represents a monopolistic competitor and demand curve D1 represents a perfect competitor, then
A. the perfect competitor has a more elastic demand curve than the monopolistic competitor.
B. the monopolistic competitor has a more elastic demand curve than the perfect competitor.
C. the perfect competitor and the monopolistic competitor have identical elasticity in their demand curves.
D. None of these choices are true.
23. Statement I. The airlines often engage in price discrimination.
Statement II. Price discrimination occurs when a seller charges two or more prices for the same good or service.
A. Statement I is true and statement II is false.
B. Statement II is true and statement I is false.
C. Both statements are true.
D. Both statements are false.
Explanation / Answer
(20) The correct answer is option (A). The complete horizontal line D1.
(21) The correct answer is option (B). If demand curve D2 represents a monopolistic competitor and demand curve D3 represents a monopoly, then the monopolistic competitor has a more elastic demand curve than the monopolist.
(22) The correct answer is option (A). If demand curve D2 represents a monopolistic competitor and demand curve D1 represents a perfect competitor, then the perfect competitor has a more elastic demand curve than the monopolistic competitor.
(23) The correct answer is option (C). Both statements are True.
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