Monopolistic competition

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  • Created by: Jade
  • Created on: 01-12-12 12:41

1. Which of these is NOT a characteristic of monopolistic competition

  • Good knowledge
  • Firms are price takers
  • Non-homogeneous products
  • Low barriers to entry and exit
  • Many small buyers and sellers with a small market share
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2. Allocative efficiency is being achieved

  • False
  • True

3. Monopolistically competitive firms have _________ - this is because their products are differentiated.

  • Price taking power
  • Some price making power
  • Price making power

4. In both short run and long run - in terms of allocative efficiency...

  • P>MC
  • P=MC
  • P

5. Non-price competition is competition between firms on the basis, of, for example, branding, customer service, location, range of products, advertising are indicative of how firms seek to gain market share.

  • True
  • False

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