Reading 20: Monopolistic Competition and Oligopoly - LOS a

答案和详解如下：

6.Which one of the following structures is characterized by free entry and exit, a differentiated product, and price searcher behavior?

A)   Oligopoly.

B)   Monopolistic competition.

C)   Pure competition.

D)   Pure monopoly.

The correct answer was B)

Monopolistic competition is another name for competitive price-searcher markets. There are a large number of independent sellers, each produces a differentiated product, each market has a low barrier to entry, and each producer faces a downward sloping demand curve.

7.Monopolistic competition differs from pure monopoly in that:

A)   monopolists maximize profits and monopolistic competitors do not.

B)   monopolistic competitors face a downward-sloping demand curve and monopolists do not.

C)   monopolistic competitors have low barriers to entry and monopolists do not.

D)   monopolistic competitors are price takers and monopolists are not.

The correct answer was C)

Another name for monopolistic competition is a competitive price searcher market. Monopolistic competition refers to a large number of independent sellers, each produces a differentiated product, each market has a low barrier to entry, and each producer faces a downward sloping demand curve.

8.Monopolistic competition differs from pure monopoly in that:

A)   barriers to entry are high under monopoly, but low under monopolistic competition.

B)   monopolistic competitors are price takers, monopolists are not.

C)   monopolistic competitors face downward sloping demand curves, monopolists do not.

D)   monopolists maximize profit; monopolistic competitors do not.

The correct answer was A)    

Monopolistic competition is characterized by the low barriers to enter its competitive markets. In contrast, a monopoly exists only where there are high barriers to market entry.

9.The demand curves faced by monopolistic competitors is:

A)   inelastic due to the availability of many complementary goods.

B)   elastic due to the availability of many close substitutes.

C)   flat due to the allocative efficiency of price searcher markets.

D)   not sensitive to price due to absence of close substitutes.

The correct answer was B)

The demand for products from monopolistic competitors is elastic due to the availability of many close substitutes. If a firm increases its product price, it will lose customers to firms selling substitute products.

10.Firms in perfectly competitive markets and firms operating in a market characterized by monopolistic competition have several things in common. Which of the following is least likely one of them?

A)   Both maximize economic profit.

B)   Both face perfectly elastic demand curves.

C)   Both operate in markets that have low or no barriers to entry.

D)   Both produce where MR = MC.

The correct answer was B)

The only item listed in the question that monopolistic competition and pure competition do not have in common is a perfectly elastic demand curve. Under pure competition, producers face a perfectly elastic demand curve, whereas price searchers face downward sloping demand curves.