CA Foundation P4 · Chapter 4 · Question 10 of 15
Product differentiation and selling costs are distinguishing features of:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Monopolistic competition
Explanation
Under monopolistic competition many firms sell close but differentiated products (brands, design, packaging) and incur selling costs such as advertising to attract buyers. Perfect competition has homogeneous products and no need for advertising.
More Price Determination in Different Markets MCQs
- Q12The kinked demand curve model of oligopoly is used mainly to explain:
- Q13The most distinctive feature of an oligopoly is:
- Q14A formal agreement among oligopolistic firms to fix prices or share output, in order to act like a monopoly, is called:
- Q15A perfectly competitive firm faces a market price of Rs. 25. At its profit-maximising output of 400 units, its average total cost is Rs…
- Q1The demand curve facing an individual firm under perfect competition is: