Monopolistic competiton is best represented by:Select one:a. Carrots, onions and tomato sold in a marketb. Cereal, soft drinks, and hot dogs that can be bought anywherec. Tobacco, automobiles and gasoline sold by a few companiesd. Internationl dialing controlled by a telecommunications company
Question
Monopolistic competiton is best represented by:Select one:a. Carrots, onions and tomato sold in a marketb. Cereal, soft drinks, and hot dogs that can be bought anywherec. Tobacco, automobiles and gasoline sold by a few companiesd. Internationl dialing controlled by a telecommunications company
Solution
The best representation of monopolistic competition is option b. Cereal, soft drinks, and hot dogs that can be bought anywhere.
Here's why:
Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another. In this case, the products (cereal, soft drinks, hot dogs) are differentiated but not unique, and they can be bought anywhere, meaning there are many producers (companies) in the market.
Option a. is more representative of perfect competition where the products are identical and sold by many sellers.
Option c. is more representative of an oligopoly where a few companies control the majority of the market share.
Option d. is more representative of a monopoly where one company controls the entire market.
Similar Questions
What type of products do firms in monopolistic competition sell?Homogenous productsDifferentiated productsIdentical productsSubstitute products
Which of the following markets could be considered monopolistically competitive? (Choose all that apply.)Multiple select question.Cable TVHotelsFast foodAir travelClothing
All of the following industries are examples of oligopolistic markets exceptGroup of answer choicesautomobile manufacturingaircraft manufacturingthe broadcasting industryfast food restaurants
In a monopolistically competitive market, which of the following is most likely to be observed?a.Standardized, homogenous productsb.Collusion and price-fixing between firmsc.Government antitrust oversightd.Non-price competition, such as advertisingClear my choice
Monopolistically competitive firmsGroup of answer choiceshave market power because they can set price above marginal cost.have no market power because they earn zero economic profit.have no market power because of free entry.have no market power because price equals marginal cost.
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.