JonnyKay

A market that is characterized by monopolistic competition is least likely to feature:

A) low barriers to entry.

B) a small number of independent sellers.

C) sellers that produce a differentiated product.

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In monopolistic competition, there is a large, not small, number of independent sellers.

JonnyKay

Which of the following is most likely to be considered a characteristic of monopolistic competition?

A) Inelastic demand curves.

B) High barriers to entry and exit.

C) Differentiated products.

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Differentiated products are a key characteristic of monopolistic competition. Although producers have downward sloping demand curves, they are typically elastic.

JonnyKay

Which of the following is least likely to be considered a feature that is common to both monopolistic competition and perfect competition?

A) Extensive advertising to differentiate products.

B) Low or no barriers to entry.

C) Zero economic profits in the long run.

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The only item listed in the question that monopolistic competition and perfect competition do not have in common is the use of advertising to differentiate their products. Extensive advertising is a key feature of monopolistic competition.

JonnyKay

An oligopoly is characterized by all of the following EXCEPT:

A) a large number of sellers.

B) large economies of scale.

C) significant barriers to entry.

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Oligopolies consist of a small number of sellers. Their products may be either similar or differentiated.

JonnyKay

Which one of the following is least likely a characteristic of monopolistic competition?

A) Low barriers to entry and exit.

B) A single seller.

C) Differentiated products.

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There are many sellers or producers who sell differentiated products that permit firms to attract customers without reducing price; and there are low barriers to entry.

JonnyKay

Characteristics of monopolistic competition include all of the following EXCEPT:

A) large numbers of independent sellers.

B) high barriers to entry.

C) differentiated products.

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Monopolistic competition has low barriers to entry.

JonnyKay

An oligopolistic industry least likely has:

A) many sellers.

B) high barriers to entry.

C) large economies of scale.

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An oligopolistic industry has a few sellers with large economies of scale, a great deal of interdependence among firms, and high barriers to entry.

JonnyKay

Which of the following is least likely a characteristic of an oligopoly?

A) Relatively small economies of scale.

B) Products can either be similar or differentiated.

C) There are few sellers.

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Oligopolies have large economies of scale and interdependence among competitors.

JonnyKay

Which of the following is most likely to be considered a characteristic of an oligopolistic industry?

A) Few barriers to entry.

B) A great deal of interdependence among firms.

C) Many sellers.

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An oligopolistic industry has a great deal of interdependence among firms. One firm’s pricing decisions or advertising activities will affect the other firms' demand curves.

JonnyKay

The demand curves faced by monopolistic competitors is:

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

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

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

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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.