question archive Which of the following most closely represents the conditions of monopolistic competition? a
Which of the following most closely represents the conditions of monopolistic competition? a
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Which of the following most closely represents the conditions of monopolistic competition?
a. the restaurant industry, which is characterized by many firms producing differentiated products with free entry and exit
b. a cable television service, where a licensed supplier provides service to a local community
c. the market for grade A milk, which is characterized by many firms producing an identical product
d. the market for jumbo jets, where one major domestic firm competes with one major foreign firm
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Which of the following most closely represents the conditions of monopolistic competition?
| a. the restaurant industry, which is characterized by many firms producing differentiated products with free entry and exit | Yes, this is the best example. |
|---|---|
| b. a cable television service, where a licensed supplier provides service to a local community | No, because there are only a few suppliers and there is not free entry. |
| c. the market for grade A milk, which is characterized by many firms producing an identical product | No, because identical products are in the perfectly competitive market. |
| d. the market for jumbo jets, where one major domestic firm competes with one major foreign firm | No, because monopolistic competition requires many competing firms. |
