Question

Monopolistic competition in a market is characterized by:

Select one:

a.

many firms, downward-sloping demand curves, and zero economic profit in the long run.

Monopolistic competition is a:

Select one:

a.

group of suppliers that try to act as if they were a monopoly.

b.

market that is dominated by a small number of firms.

c.

market with a large number of firms selling similar but not identical products.

d.

group of suppliers that try to act as if they were a perfectly competitive market.

Informative advertising:

Select one:

a.

degrades the competitive process by increasing the costs of firms.

b.

degrades the competitive process by confusing the consumer with information about prices and new products.

c.

improves the competitive process by educating the consumer about prices and new products.

d.

improves the competitive process by making all products appear to be the same.

b.

several dominant firms, perfectly elastic demand curves, and above-normal profits.

c.

many firms, perfectly elastic demand curves, and zero economic profit in the long run.

d.

several firms, inelastic demand curves, and long-run monopoly profit.

Answer 1

1. Many firms .

2. Market with a large number of firms selling similar but not identical products.

3. Improve the competitive process by educating the consumer about prices and new products.

Monopolistic competition refers to a market situation in which there are large firms which sell closely related but differentiated products.

Informative advertising is advertising that is carried out in an informative manner. The idea is to give the ad the look of an official article to give it more credibility its and it generates a good reputation.