1. Allocative efficiency is being achieved
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2. 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.
3. 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
4. Given the product differentiation, it should be clear that firms in monopolistic competition compete through ?
- Non-price competition
- Price competition
5. Which of these is NOT a characteristic of monopolistic competition
- Low barriers to entry and exit
- Good knowledge
- Firms are price takers
- Many small buyers and sellers with a small market share
- Non-homogeneous products
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