1. Monopolistically competitive firms have _________ - this is because their products are differentiated.
- Some price making power
- Price making power
- Price taking power
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2. What is monopolistic competition?
- Monopolistic competition is a market structure with many firms producing a differentiated product where there are few barriers to entry and exit
- Monopolistic competition is a market structure with a single firm in the industry
3. Given the product differentiation, it should be clear that firms in monopolistic competition compete through ?
- Non-price competition
- Price competition
4. Which of these is most similar to monopolistic competition?
- Taxi services
- Low cost airlines
- Agricultural products
- Local bus services
5. In monopolistic competition, is being productive efficiency achieved?
- Productive efficiency is not being achieved, since in the short run and long run, the firm is operating on the downward-sloping part of the AC curve
- Productive efficiency is being achieved, since in the short run and long run, the firm is operating at the lowest point of the AC curve
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