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Chapter 014 Monopolistic Competition and Oligopoly File: Chapter 014 Monopolistic Competition and Oligopoly Multiple Choice [Question] 1. Monopolistic competition means: A. a market situation where competition is based entirely on product differentiation and advertising. B. a large number of firms producing a standardized or homogeneous product. C. many firms producing differentiated products. D. a few firms producing a standardized or homogeneous product. Answer: C Topic: Monopolistic competition: definition; characteristics Learning Objective: 14-01: List the characteristics of monopolistic competition. Difficulty: 1 Easy Blooms: Level 1 Remember AACSB: Analytic [Question] 2. Monopolistic competition is characterized by a: A. few dominant firms and low entry barriers. B. large number of firms and substantial entry barriers. C. large number of firms and low entry barriers. D. few dominant firms and substantial entry barriers. Answer: C Topic: Monopolistic competition: definition; characteristics Learning Objective: 14-01: List the characteristics of monopolistic competition. Difficulty: 1 Easy Blooms: Level 1 Remember AACSB: Analytic [Question] 3. Under monopolistic competition entry to the industry is: A. completely free of barriers. B. more difficult than under pure competition but not nearly as difficult as under pure monopoly. C. more difficult than under pure monopoly. D. blocked. Answer: B Topic: Monopolistic competition: definition; characteristics Learning Objective: 14-01: List the characteristics of monopolistic competition. Difficulty: 1 Easy Blooms: Level 1 Remember AACSB: Analytic Chapter 014 Monopolistic Competition and Oligopoly [Question] 4. Monopolistic competition resembles pure competition because: A. both industries emphasize nonprice competition. B. in both instances firms will operate at the minimum point on their long-run average total cost curves. C. both industries entail the production of differentiated products. D. barriers to entry are either weak or nonexistent. Answer: D Topic: Monopolistic competition: definition; characteristics Learning Objective: 14-01: List the characteristics of monopolistic competition. Difficulty: 2 Medium Blooms: Level 2 Understand AACSB: Reflective Thinking [Question] 5. Which of the following is not a basic characteristic of monopolistic competition? A. the use of trademarks and brand names B. recognized mutual interdependence C. product differentiation D. a relatively large number of sellers Answer: B Topic: Monopolistic competition: definition; characteristics Learning Objective: 14-01: List the characteristics of monopolistic competition. Difficulty: 1 Easy Blooms: Level 1 Remember AACSB: Analytic [Question] 6. Nonprice competition refers to: A. competition between products of different industries, for example, competition between aluminum and steel in the manufacture of automobile parts.... View Full Document

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