BuyFindarrow_forward

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050

Solutions

Chapter
Section
BuyFindarrow_forward

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050
Textbook Problem

Which of the following conditions does NOT describe a firm in a monopolistically competitive market?

a. It sells a product different from its competitors.

b. It takes its price as given by market conditions.

c. It maximizes profit both in the short run and in the long run.

d. It has the freedom to enter or exit in the long run.

To determine
Monopolistic competition and its features.

Answer

Option ‘b’ is the correct answer.

Explanation

Option (b):

Similar to monopoly, monopolistic markets are price setters, rather than price takers. Therefore, it does not take the price given by market conditions. Thus, option ‘b’ is correct.

Option (a):

In a monopolistic competitive market, products are differentiated; that is, it sells similar (but not identical) products of its competitors. Since the statement is a feature of monopolistic market, option ‘a’ is incorrect.

Option (c):

A monopolistic competitive market can attain profit maximization both in the short run as well as the long run. Hence, option ‘c’ is incorrect.

Option (d):

Since the monopolistic market features free entry and exit of firms in the market, option ‘d’ is incorrect.

Concept

Concept introduction:

Monopolistic competition: It is an imperfect market structure in which many firms sell products that are differentiated from one another.

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What are value-added activities? Value-added costs?

Managerial Accounting: The Cornerstone of Business Decision-Making

Over the past few years, has there been a strong correlation between stock price performance and reported earni...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

What is an invoice?

Pkg Acc Infor Systems MS VISIO CD

Define an internal transaction and provide an example.

College Accounting (Book Only): A Career Approach

Find all the answers to your study problems with bartleby.
Textbook solutions plus Q&A. Get As ASAP arrow_forward