Answer to Question #184997 in Microeconomics for James

Question

QUESTION 16

A monopolistically competitive industry will:

1. Cease to exist.
2. Charge a higher price than would a perfectly competitive industry.
3. Produce a smaller quantity than would a perfectly competitive industry.
4. Both answers A and B above.
5. Both answers B and C above.

QUESTION 17

A monopolistically competitive industry does not display:

1. Its wares.
2. Productive or allocative efficiency.
3. Productive efficiency, but it is allocatively efficient.
4. Allocative efficiency, but it is productively efficient.
5. All of the above.  

QUESTION 18

Product differentiation is based on:

1. Variety.
2. Innovation.
3. Variety and innovation.
4. Variety but not innovation.
5. Innovation but not variety.

Answer 1

1. 5
2. 2
3. 3