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- Subject
- Monopoly & Competitioneconomics-mcqs › monopoly-competition
- Published
- 30 May 2019
- Last updated
- 28 May 2026
Explanation
In monopolistic competition, firms face free entry and exit, many sellers compete, and products are differentiated. However, they do not earn long-run economic profits due to competition driving profits to zero over time.
More Monopoly & Competition MCQs
Practice related questions from the same subject.
- 1.Which of the following is NOT commonly cited as a criticism of advertising and brand names?
- 2.Which type of company is most likely to allocate a significant portion of its sales revenue to advertising?
- 3.Why does the term "competition" apply to the market structure known as "monopolistic competition"?
- 4.In monopolistic competition, inefficiency arises because the price exceeds marginal cost, leading to some valuable units not being produced due to what reason?
- 5.Among the following types of businesses, which one is least motivated to invest in advertising?
- 6.In the short term, when a firm's price exceeds its average total cost in a monopolistically competitive market, what is the likely outcome?
- 7.Among the following items, which one is least commonly found in a monopolistic competition market structure?
- 8.Which of the following is not commonly cited by economists as a benefit of advertising?
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