Table of contents

0. Basic Principles of Economics1h 5m
1. Reading and Understanding Graphs59m
2. Introductory Economic Models1h 10m
3. The Market Forces of Supply and Demand2h 26m
4. Elasticity2h 26m
5. Consumer and Producer Surplus; Price Ceilings and Floors3h 45m
6. Introduction to Taxes and Subsidies1h 46m
7. Externalities1h 12m
8. The Types of Goods1h 13m
9. International Trade1h 16m
10. The Costs of Production2h 35m
11. Perfect Competition2h 23m
12. Monopoly2h 13m
13. Monopolistic Competition1h 9m
14. Oligopoly1h 26m
15. Markets for the Factors of Production1h 26m
16. Income Inequality and Poverty35m
17. Asymmetric Information, Voting, and Public Choice39m
18. Consumer Choice and Behavioral Economics1h 16m

13. Monopolistic Competition

Revenue in Monopolistic Competition

Microeconomics

13. Monopolistic Competition

Revenue in Monopolistic Competition

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Multiple Choice

In monopolistic competition, firms have power to set the price of its produce because

No; there are no barriers to entry

Some; of product differentiation

No; of product differentiation

Some; there are barriers to entry

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Verified step by step guidance

Understand the concept of monopolistic competition: It is a market structure where many firms sell products that are similar but not identical. Each firm has some degree of market power due to product differentiation.

Recognize that in monopolistic competition, firms have some power to set prices because their products are differentiated from those of their competitors. This differentiation can be based on quality, branding, location, or other attributes.

Identify that the presence of product differentiation allows firms to have some control over their pricing, as consumers may prefer one product over another due to these differences.

Acknowledge that there are no significant barriers to entry in monopolistic competition, which means new firms can enter the market if they perceive an opportunity to profit.

Conclude that the correct answer is 'Some; of product differentiation' because firms have some power to set prices due to the unique characteristics of their products, despite the lack of barriers to entry.