ECONOMICS
COMPETITION AND MARKET STRUCTURES
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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higher
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lower
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Either A or B
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None of the above
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Detailed explanation-1: -What are the four conditions to monopolistic competition? The four conditions to monopolistic competition are a large number of firms, similar but not perfectly substitutable products, low barriers to entry, and less than perfect information.
Detailed explanation-2: -One of the characteristics of a monopolistic competitive market is that each firm must differentiate its products. Two ways to do this is through advertising and cultivating a brand.
Detailed explanation-3: -Economic market structures can be grouped into four categories: perfect competition, monopolistic competition, oligopoly, and monopoly. The categories differ because of the following characteristics: The number of producers is many in perfect and monopolistic competition, few in oligopoly, and one in monopoly.
Detailed explanation-4: -A monopoly is the type of imperfect competition where a seller or producer captures the majority of the market share due to the lack of substitutes or competitors. A monopolistic competition is a type of imperfect competition where many sellers try to capture the market share by differentiating their products.