Principles of Microeconomics
7th Edition
ISBN: 9781305156050
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 16, Problem 1CQQ
To determine
Monopolistic competition and its features.
Expert Solution & Answer
Answer to Problem 1CQQ
Option ‘b’ is the correct answer.
Explanation of Solution
Option (b):
Similar to
Option (a):
In a monopolistic competitive market, products are differentiated; that is, it sells similar (but not identical) products of its competitors. Since the statement is a feature of monopolistic market, option ‘a’ is incorrect.
Option (c):
A monopolistic competitive market can attain profit maximization both in the short run as well as the long run. Hence, option ‘c’ is incorrect.
Option (d):
Since the monopolistic market features free entry and exit of firms in the market, option ‘d’ is incorrect.
Economics Concept Introduction
Concept introduction:
Monopolistic competition: It is an imperfect market structure in which many firms sell products that are differentiated from one another.
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Which of the following conditions does NOT describe a firm in a monopolistically competitive market?
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d.It has the freedom to enter or exit in the long run.
Which of the following conditions does NOT describe afirm in a monopolistically competitive market?a. It sells a product different from its competitors.b. It takes its price as given by market conditions.c. It maximizes profit both in the short run and inthe long run.d. It has the freedom to enter or exit in the long run.
A. How does the demand curve faced by the firm in monopolistically competitive market differ from the demand curve faced by a firm participating in a purely competitive market? b. How does that impact how the firm sets its price and the quantity the firm produces?
Chapter 16 Solutions
Principles of Microeconomics
Ch. 16.1 - Prob. 1QQCh. 16.2 - Prob. 2QQCh. 16.3 - Prob. 3QQCh. 16 - Prob. 1CQQCh. 16 - Prob. 2CQQCh. 16 - Prob. 3CQQCh. 16 - Prob. 4CQQCh. 16 - Prob. 5CQQCh. 16 - If advertising makes consumers more loyal to...Ch. 16 - Prob. 1QR
Ch. 16 - Prob. 2QRCh. 16 - Prob. 3QRCh. 16 - Prob. 4QRCh. 16 - How might advertising reduce economic well-being?...Ch. 16 - Prob. 6QRCh. 16 - Prob. 7QRCh. 16 - Prob. 1PACh. 16 - Prob. 2PACh. 16 - Prob. 3PACh. 16 - Prob. 4PACh. 16 - Prob. 5PACh. 16 - Prob. 6PACh. 16 - Prob. 7PACh. 16 - Prob. 8PACh. 16 - Prob. 9PACh. 16 - Sleek Sneakers Co. is one of many firms in the...
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