Question

CH12

3. The monopoly aspect of monopolistic competition is that there is only one seller.

True

False

6. Which type of firm engages in nonprice competition?

Monopolistically competitive firms.

Perfectly competitive firms.

Price takers.

Extremely efficient firms.

8. Monopolistic competition results in allocative

Inefficiency and productive efficiency.

Inefficiency and productive inefficiency.

Efficiency and productive efficiency.

Efficiency and productive inefficiency.

9. One symptom of the inefficiencies associated with monopolistic competition is industrywide excess capacity.

True

False

16. A World View article titled "The Best Global Brands" discusses the value of brand names. In 2014 which of the following was the most valuable brand name?

Apple.

Google.

Coca-Cola.

McDonalds.

Answer 1

1. FALSE Because monopoly aspect of monopolistic competition is that producer is a price maker . And not that there is only one seller because under monopolistic competition there are many sellers who sell the close and differentiated products.

2. Monopolistically competitive firms engage in non-price competition.Because non-price competition refers to the effort on the part of a firm to increase its sales and profits through product variation and selling expenses . And the monopolistic competitor always can always change his product either by varying its physical attributes or by changing promotional programmes. Hence, Option(A) is correct.

3. Monopolistic competition results in allocative inefficiency and productive inefficiency. Hence, option(B) is correct.

4. TRUE one symptom of the inefficiencies associated with monopolistic competition is industrywide excess capacity.

5. APPLE is the most valuable brand name in 2014. Hence, option(A) is correct.