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Monopolistic Competition

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Monopolistic Competition
CHAPTER 25
Monopolistic Competition and Oligopoly

Topic Question numbers
___________________________________________________________________________________________________

1. Monopolistic competition: definition; characteristics 1-17
2. Demand curve 18-24
3. Price-output behavior 25-78
4. Efficiency aspects 79-88
5. Oligopoly: definition; characteristics 89-112
6. Concentration ratio; Herfindahl Index 113-140
7. Game theory 141-156
8. Kinked-demand curve model 157-176
9. Collusion; cartels; price leadership 177-194
10. Advertising 195-200
11. Efficiency aspects 201-204
12. Review of four structures 205-226 Consider This 227-228 Last Word 229-233 True-False 234-258
___________________________________________________________________________________________________

Multiple Choice Questions

Monopolistic competition: definition; characteristics

Type: D Topic: 1 E: 460 MI: 216 1. Monopolistic competition means: A) a market situation where competition is based entirely on product differentiation and advertising. B) a large number of firms producing a standardized or homogeneous product. C) many firms producing differentiated products. D) a few firms producing a standardized or homogeneous product.
Answer: C

Type: A Topic: 1 E: 461 MI: 217 2. Monopolistic competition is characterized by a: A) few dominant firms and low entry barriers. B) large number of firms and substantial entry barriers. C) large number of firms and low entry barriers. D) few dominant firms and substantial entry barriers.
Answer: C

Type: A Topic: 1 E: 461 MI: 217 3. Under monopolistic competition entry to the industry is: A) completely free of barriers. B) more difficult than under pure competition but not nearly as difficult as under pure monopoly. C) more difficult than under pure monopoly. D) blocked.
Answer: B

Type: A Topic: 1 E:
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