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2. Product differentiation in monopolistic competition Consider two gas stations. One is located at a major intersection used by people commuting from populous neighborhoods to jobs located in the downtown area. The other is located on the outskirts of the city. Both gas stations sell high-grade or premium-grade gas for a higher price than low- grade or regular-grade gas. However, the gas station along the more congested route charges higher gas prices for all grades than the station on the outskirts of town. These gas stations offer product differentiation based on which of the following? Check all that apply. Location Quality Style True or False: Positive short-run profit can occur as a result of advertising in a monopolistically competitive market. True False

2. Product differentiation in monopolistic competition Consider two gas stations. One is located at a major intersection used by people commuting from populous neighborhoods to jobs located in the downtown area. The other is located on the outskirts of the city. Both gas stations sell high-grade or premium-grade gas for a higher price than low- grade or regular-grade gas. However, the gas station along the more congested route charges higher gas prices for all grades than the station on the outskirts of town. These gas stations offer product differentiation based on which of the following? Check all that apply. Location Quality Style True or False: Positive short-run profit can occur as a result of advertising in a monopolistically competitive market. True False

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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2. Product differentiation in monopolistic competition Consider two gas stations. One is located at a major intersection used by people commuting from populous neighborhoods to jobs located in the downtown area. The other is located on the outskirts of the city. Both gas stations sell high-grade or premium-grade gas for a higher price than low- grade or regular-grade gas. However, the gas station along the more congested route charges higher gas prices for all grades than the station on the outskirts of town. These gas stations offer product differentiation based on which of the following? Check all that apply. Location Quality Style True or False: Positive short-run profit can occur as a result of advertising in a monopolistically competitive market. True False
Transcribed Image Text:2. Product differentiation in monopolistic competition Consider two gas stations. One is located at a major intersection used by people commuting from populous neighborhoods to jobs located in the downtown area. The other is located on the outskirts of the city. Both gas stations sell high-grade or premium-grade gas for a higher price than low- grade or regular-grade gas. However, the gas station along the more congested route charges higher gas prices for all grades than the station on the outskirts of town. These gas stations offer product differentiation based on which of the following? Check all that apply. Location Quality Style True or False: Positive short-run profit can occur as a result of advertising in a monopolistically competitive market. True False
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