Reading20: Monopolistic Competition and Oligopoly - LOS a ～ style, white, black, demand, class

mayanfang1

Q20. The demand curves faced by monopolistic competitors is:

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

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

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

Q21. Monopolistic competition differs from pure monopoly in that:

A)   monopolists maximize profit; monopolistic competitors do not.

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

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

mayanfang1

答案和详解如下：

Q20. The demand curves faced by monopolistic competitors is:

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

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

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

Correct answer is A)

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.

Q21. Monopolistic competition differs from pure monopoly in that:

A)   monopolists maximize profit; monopolistic competitors do not.

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

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

Correct answer is B)

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.

fange520

ab

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Michjay

a

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