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Economics Mcqs
Q
The use of the word “monopoly” in the name of the market structure called “monopolistic competition” refers to the fact that ?
AA. Monopolistically competitive firms charge prices equal to their marginal costs just like monopolists
BB. A monopolistically competitive firms faces a downward-sloping demand curve for its differentiated product and so does a monopolist
CC. Monopolistically competitive markets have free entry and exit just like a monopolistic market
DD. Monopolistically competitive firms produce beyond their efficient scale and so do monopolists
Correct Answer:
B. B. A monopolistically competitive firms faces a downward-sloping demand curve for its differentiated product and so does a monopolist
