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Monopolistic Competition

If a firm sel...

Question

If a firm sells its output on a market that is characterized by many sellers and buyers, a differentiated product, and unlimited long-run resource mobility, then the firm is ______

A

a monopolist

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B

an oligopolist

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C

a perfect competitor

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D

a monopolistic competitor

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Solution

The correct option is D
a monopolistic competitor

Differentiated products and a large number of buyers and sellers characterize monopolistic competition.

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Q. A firm that sells products in a market characterised by many sellers and buyers, differentiated products, and unlimited long-run resource mobility is

Q. Give reasons or explain:

1. Single price prevails in perfect competition.

2. Price discrimination is possible under monopoly.

3. Selling cost is incurred by a firm in Monopolistic competition.

4. A monopolist can control the supply of goods.

5. Sellers and the buyers are price takers in perfect competition.

Q. When compared to a perfect competition, a monopolistic competitor decides to have .

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Q. Fill in the blanks with appropriate alternatives given in the brackets:

1. Under perfect competition commodities are ________________ in nature. (homogeneous/ classified/ heterogeneous/ supplementary)

2. _____________ appears in a monopoly market. (product differentiation/ price discrimination/ individual differentiation/ packing differentiation)

3. The price at which demand and supply equate to each other is called _______ price. (general/ equilibrium/ short-run/ reserve)

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