16 - Chapter 16 Monopolistic Competition TRUE/FALSE 1. The

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Unformatted text preview: Chapter 16 Monopolistic Competition TRUE/FALSE 1. The "competition" in monopolistically competitive markets is most likely a result of having many sellers in the market. ANS: T DIF: 1 REF: 16-1 NAT: Analytic LOC: Monopolistic competition TOP: Monopolistic competition MSC: Interpretive 2. The "monopoly" in monopolistically competitive markets is most likely a result of firms having some pricing power due to product differentiation. ANS: T DIF: 1 REF: 16-1 NAT: Analytic LOC: Monopolistic competition TOP: Monopolistic competition MSC: Interpretive 3. Monopolistic competition is characterized by many buyers and sellers, product differentiation, and free entry. ANS: T DIF: 1 REF: 16-1 NAT: Analytic LOC: Monopolistic competition TOP: Monopolistic competition MSC: Definitional 4. Monopolistic competition is characterized by many buyers and sellers, product differentiation, and barriers to entry. ANS: F DIF: 1 REF: 16-1 NAT: Analytic LOC: Monopolistic competition TOP: Monopolistic competition MSC: Definitional 5. A monopolistically competitive market is characterized by barriers to entry. ANS: F DIF: 1 REF: 16-1 NAT: Analytic LOC: Monopolistic competition TOP: Monopolistic competition MSC: Interpretive 6. Monopolistic competition is the only market structure that features many sellers. ANS: F DIF: 1 REF: 16-1 NAT: Analytic LOC: Monopolistic competition TOP: Markets MSC: Interpretive 7. Product differentiation always leads to some measure of market power. ANS: T DIF: 2 REF: 16-1 NAT: Analytic LOC: Monopolistic competition TOP: Demand curve MSC: Interpretive 122 123 Chapter 16/Monopolistic Competition 8. Oligopoly is characterized by a few sellers offering similar products, whereas monopolistic competition is characterized by many sellers offering differentiated products. ANS: T DIF: 2 REF: 16-1 NAT: Analytic LOC: Monopolistic competition TOP: Monopolistic competition MSC: Definitional 9. Monopolistic competition is characterized by a few sellers offering similar products, whereas oligopoly is characterized by many sellers offering differentiated products. ANS: F DIF: 2 REF: 16-1 NAT: Analytic LOC: Monopolistic competition TOP: Monopolistic competition MSC: Definitional 10. Oligopoly and monopolistic competition are examples of a market structure called imperfect competition. ANS: T DIF: 1 REF: 16-1 NAT: Analytic LOC: Monopolistic competition TOP: Monopolistic competition MSC: Definitional 11. Monopolistic competition and monopoly are examples of a market structure called imperfect competition. ANS: F DIF: 1 REF: 16-1 NAT: Analytic LOC: Monopolistic competition TOP: Monopolistic competition MSC: Definitional 12. A markup of price over marginal cost is inconsistent with free entry and zero profit....
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16 - Chapter 16 Monopolistic Competition TRUE/FALSE 1. The

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