Question

Which of the following sizes of the market make market coordination easier?

a.	Many smaller firms	b.	A few firms of same size
c.	More than four firms	d.	One large and many small firms

Which of the following characterizes a monopolistically competitive market?

a.	Many large firms	b.	One firm
c.	Many small firms	d.	A few large firms

Monopolistic competition is which of the following types of markets?

a.	A market dominated by a large firm	b.	A market in which firms are price takers
c.	A market that produces a differentiated product	d.	A market that produces a homogeneous product

Which of the following do monopolistic competitive markets have?

a.	Very high barriers to entry	b.	A market structure that has been changed many times
c.	A widely accepted model for analysis	d.	No accepted single model

Answer 1

1. b. a few firms of same size.

Coordination is easier when the number of firms is small and the firms are similar in size.

2. a. many large firms.

Monopolistically competitive markets feature a large number of competing firms, but the products that they sell are not identical.

3. c. A market that produces a differentiated product

In a Monopolistic Competition, each seller produces a differentiated product which is easily distinguishable from its close substitutes.

4. c. A widely accepted model for analysis