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Question 11 ptsWhich of the following characteristics of perfect competition does notGroup of answer choices

 apply in monopolistic competition?

free entry and exit


homogeneous products


numerous participants


perfect information

 

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Question 2

1 pts

Which of the following conditions distinguishes the monopolistic competitor from the monopolist?

Group of answer choices



profit-maximizing rule


downward slope of demand curve


entry of rivals


short-run economic profits

 

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Question 3

1 pts

A perfectly competitive firm and a monopolistically competitive firm are similar in each of the following respects except

Group of answer choices



each has many buyers and sellers.


firms sell homogeneous products in both markets.


in having perfect information.


for freedom of exit and entry.

 

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Question 4

1 pts

The demand curve for a monopolistic competitor slopes downward because

Group of answer choices



demand drops to zero after a slight price increase.


there are close but not perfect substitutes for the product.


customers have no loyalty to the product.


the product is undifferentiated.

 

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Question 5

1 pts

A monopolistically competitive firm

Group of answer choices



tries to differentiate its product from competitors' products.


faces a perfectly elastic demand curve for its product.


has more monopoly power in the long run than does a perfectly competitive firm.

 

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Question 6

1 pts

The monopolistically competitive firm in short-run equilibrium

Group of answer choices



faces a downward-sloping demand curve.


has a marginal revenue curve which lies above its demand curve.


maximizes profit where P = ATC.


All of the above are correct.

 

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Question 7

1 pts

Oligopolists

Group of answer choices



are price takers.


rarely advertise.


must take rivals' reactions into account.


offer homogeneous products.

 

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Question 8

1 pts

Game theory applies to problems that arise in

Group of answer choices



perfect competition.


monopolies.


oligopolies.


pure competition.

 

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Question 9

1 pts

The analysis of oligopolistic behavior is difficult because

Group of answer choices



there are few real-world examples of oligopolies for economists to study.


oligopolists make decisions independently of each other.


firms in oligopolistic industries react to each other's behavior in many ways.


economists have paid little attention to the topic in recent years and so have not yet applied to it the techniques of modern economic theory.

 

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Question 10

1 pts

A cartel is

Group of answer choices



a group of oligopolists who try to behave like a single monopolist and split the benefits among themselves.


a government-approved organization for the exchange of technical information among firms.


a form of competition among oligopolists.


a regulated industry that is officially permitted to set the price of its product above long-run average total cost.

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