Which would be characteristic of monopolistic competition?
A. Relatively small market share for each firm.
B. Product standardization.
C. A potential for price-fixing through collusion.
D. Mutual interdependence among the few firms.
Answer: A
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With barriers to the entry of new firms
A) a cartel is guaranteed to earn an economic profit greater than zero. B) a cartel's members have no incentive to cheat. C) the cartel will likely earn an economic profit greater than zero. D) industry supply will expand if the firms form a cartel.
The use of checks in transactions
A) entails lower information costs than the use of currency. B) entails fewer steps than settling transactions with currency. C) avoids the cost of transporting currency back and forth. D) entails lower information and fewer steps than settling transactions with currency.