ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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many sellers
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easy market entry
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similar products sold within the same price range
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products are identical
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Detailed explanation-1: -Monopolistic competition is a market structure where there are large number of sellers selling differentiated products. There is also no barriers to entry. Every body can fix the price as per their choice. Hence, abnormal profits in the long run is not a characteristic of a monopolistically competitive market.
Detailed explanation-2: -In monopolistic competition, we still have many sellers (as we had under perfect competition). Now, however, they don’t sell identical products. Instead, they sell differentiated products-products that differ somewhat, or are perceived to differ, even though they serve a similar purpose.
Detailed explanation-3: -The correct answer is (c) Free entry is limited.
Detailed explanation-4: -Answer and Explanation: The correct answer is d. lettuce farmers. They sell identical products while in a monopolistic competition market, there is product differentiation.
Detailed explanation-5: -The presence of many companies. Each company produces similar but differentiated products. Companies are not price takers. Free entry and exit in the industry. Companies compete based on product quality, price, and how the product is marketed. 5 days ago