Answer to Question #346928 in Microeconomics for abeni

Question

Multiple choice

1 The short run equilibrium analysis under monopolistic competition is based on the following assumptions except

A There is no entry of new firms.

B the short run cost curves of each firm are similar

The products of each seller are differentiated

D The demand curve is elastic.

The factor of service is perfectly elastic in supply.

2 Which of the following doesn’t belong to the characteristics of an oligopoly market?

A interdependence of firms in decision making

 B products are homogenous of differentiated.

C There is a barrier to entry

D a and b

E none of the above.

3 One of the following is an assumption of the Cournot model:

A There are two firms each with a mineral well.

B Each firm operates at zero marginal cost

Each firm faces a downward sloping demand curve

D Each seller acts on the assumption that his competitors will react to his decision.

E a and b

Answer 1

1. B

2. D

3. E