Monopolistic Competition and Market Concentration (Edexcel A-Level Economics A): Quizzes
📚Quizzes
Practise the questions
10 questions from this quiz
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Practise the questions
10 questions from this quiz
Which THREE characteristics define monopolistic competition?
Which THREE characteristics define monopolistic competition?
Product differentiation, free entry, many firms
What type of demand curve does a monopolistically competitive firm face?
What type of demand curve does a monopolistically competitive firm face?
Downward-sloping demand curve
At what output level do monopolistically competitive firms maximize profit in the short run?
At what output level do monopolistically competitive firms maximize profit in the short run?
Where
What profit level do monopolistically competitive firms earn in long-run equilibrium?
What profit level do monopolistically competitive firms earn in long-run equilibrium?
Normal profit only
Is productive efficiency achieved in monopolistic competition?
Is productive efficiency achieved in monopolistic competition?
No, firms don't produce at minimum AC
Why is allocative efficiency NOT achieved in monopolistic competition?
Why is allocative efficiency NOT achieved in monopolistic competition?
Price exceeds marginal cost ()
What happens to existing firms' demand when new firms enter the market?
What happens to existing firms' demand when new firms enter the market?
Demand shifts left and becomes more elastic
What does the three-firm concentration ratio (CR3) measure?
What does the three-firm concentration ratio (CR3) measure?
Combined market share of 3 largest firms
What KEY feature distinguishes oligopoly from monopolistic competition?
What KEY feature distinguishes oligopoly from monopolistic competition?
Strategic interdependence between firms
In long-run equilibrium, what is the relationship between AC and demand curves?
In long-run equilibrium, what is the relationship between AC and demand curves?
AC curve is tangent to demand curve