Question

31. A good that has an external cost is

a. produced in the efficient quantity in the free market.

b. produced in greater than the efficient quantity in the free market.

c. produced in less than the efficient quantity in the free market.

d. not produced in the free market.

35. Which one of the following would not differentiate one product from another under monopolistic competition?

a. location.

b. special services that go along with the purchase of a product.

c. economies of scale.

d. physical characteristics.

e. product image

38. Monopolistic competition is a market structure best known for its

a. price leadership

b. mutual interdependence.

c. advertising and product differentiation.

d. barriers to entry

40. Which of the following would not be a characteristic of a monopolistically competitive market structure?

a. a homogeneous product.

b. many firms in the industry.

c. slight control over price.

d. no artificial barriers to entry.

e. all of the above are characteristics of a monopolistically competitive market structure.

Answer 1

31) option b)

if good has external cost then , it involves negative externality, so the production is more than effecient level

35) option C)

Economies of scale is not part of Product differentiation strategy

38) option C)

in Monopolistic Competition, large number of small firms exist that sell differentiated product , & spend on advertising to increase their sales

40) option a)

in Monopolistic Competition , the products are differentiated & not homogeneous