Multiple Choice QuestionEntry into monopolistically competitive industries isMultiple choice question.difficult compared to oligopoly.easy compared to pure competition.difficult compared to pure monopoly.easy compared to oligopoly.
Question
Multiple Choice QuestionEntry into monopolistically competitive industries isMultiple choice question.difficult compared to oligopoly.easy compared to pure competition.difficult compared to pure monopoly.easy compared to oligopoly.
Solution
The entry into monopolistically competitive industries is easy compared to oligopoly.
Here's why:
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Monopolistic competition is a market structure characterized by many firms selling differentiated products. These products are not perfect substitutes for each other, so each firm has some degree of market power.
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In an oligopoly, there are only a few firms that dominate the market. These firms are interdependent and any action by one firm will directly affect the others. This makes it difficult for new firms to enter the market as they would have to compete with these established firms.
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Therefore, compared to an oligopoly where there are high barriers to entry such as high startup costs, economies of scale, and product differentiation, entering a monopolistically competitive industry is easier.
Similar Questions
Multiple Choice QuestionCompared with oligopoly and monopoly, entry of new firms into monopolistically competitive industries isMultiple choice question.relatively difficult because average costs are high.relatively easy because firms need to develop differentiated products.relatively difficult because capital requirements are high.relatively easy because firms do not need to advertise.relatively easy because economies of scale are few.
Multiple Choice QuestionEntry to and exit from monopolistically competitive industries is Blank______.Multiple choice question.relatively easyrelatively difficultimpossibleundesirablecostless
Multiple Choice QuestionEntry of new firms into monopolistically competitive industries is relatively easy because Blank______.Multiple choice question.existing firms experience economies of scaleadvertising is not requiredcapital requirements are lowcompetitors are large firmsproduct development is unnecessary
Multiple Choice QuestionDemand for monopolistically competitive firms is Blank______.Multiple choice question.more inelastic than demand for pure monopolies due to the presence of rival firmsmore elastic than demand for firms in pure competition due to product homogeneityless elastic than demand for pure monopolies due to competitors producing substitutable goodsless elastic than demand for firms in pure competition due to fewer rivals and relative product differentiation
Multiple Choice QuestionOligopolies have Blank______.Multiple choice question.fewer firms than monopoliesthe same number of firms as monopolistic competitionthe same number of firms as perfect competitionmore firms than perfect competitionfewer firms than monopolistic competition
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