Monopolistically competitive firms use advertising exclusively to inform custome
ID: 1111200 • Letter: M
Question
Monopolistically competitive firms use advertising exclusively to inform customers about the real differences between their products and their competitors' products.
True
False
When economies of scale are present, but sufficiently large to generate a natural monopoly, the expected market structure is
Select one:
a. monopolistic competition.
b. perfect competition.
c. oligopoly.
d. monopoly.
Congestion taxes tend to cause an increase in traffic volume during rush hours.
Select one:
True
False
If in the market for used bikes only sellers can distinguish between good quality and bad quality used bikes, then in that market there exists
Select one:
a. public information.
b. asymmetric information.
c. perfect information.
d. duopoly information.
Suppose 100 townspeople value a statue of the local hero at $1 each, and construction of the statue would cost $90. Which of the following is true:
Select one:
a. It would be efficient to build the statue and it will be built because at least ninety of the townspeople will contribute to its construction.
b. the statue will not be built because it is not efficient to build a statue that costs $90 if the townspeople value it at only $1.
c. the statue will not be built because the local government does not have the power to tax only those who value it.
d. It would be efficient to build the statue, but it may not be built because some of the townspeople who value the statue will not contribute to its construction.
Explanation / Answer
Answering the first question as per Chegg policy
TRUE
Monopolies practise product differentiation to empower its consumers. They do this to make the consumers aware of the traits their product has and what the competitive firms do not.