Question 1
1 markA firm in monopolistic competition differentiates its product. What is the primary impact of this on the firm's demand curve compared to a firm in perfect competition?
Cambridge OCR A Level · Economics - H460
Monopolistic competition: Practice Questions
4 multiple-choice questions marked as you go, and 2 written questions with worked solutions. All on Monopolistic competition.
6 questions11 marksFree, no account
Question 2
1 markIn the long run, a firm in monopolistic competition is considered productively inefficient because:
Question 3
1 markWhich of the following is a characteristic shared by both perfect competition and monopolistic competition?
Question 4
1 markA firm operating in monopolistic competition is in long-run equilibrium. Which of the following conditions correctly identifies its position regarding efficiency and profit?
Question 5
3 marksIdentify the profit-maximising condition for a firm in monopolistic competition and state why it occurs in the long run only at normal profit levels.
Write your answer out first, then check it against the worked solution.
Question 6
4 marksIn a local high street, there are several independent coffee shops, each offering a slightly different atmosphere and blend of coffee.
(a) State and explain two characteristics of monopolistic competition visible in this scenario.
(b) Explain why firms in monopolistic competition can only earn normal profits in the long run.
Write your answer out first, then check it against the worked solution.
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