Monopolistic competition can acquire some market power

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Reference no: EM131385514

1. Firms in monopolistic competition can acquire some market power by:

A. using price competition.

B. increasing their output to the perfectly competitive level.

C. differentiating the product.

D. engaging in tacit collusion.

2. The model of monopolistic competition characterizes a city's market for plumbing services. Suppose that the market is initially in long-run equilibrium, and then demand for plumbing services increases. In the short run, plumbing services' price will _____ and output will _____.

A. not change; not change

B. rise; rise

C. rise; fall

D. fall; fall

Reference no: EM131385514

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