Post Utme Babcock University 2019 Commerce Question 6

Practice objective / multiple choice question 6 from the 2019 Post Utme Babcock University Commerce examination.

Post Utme Babcock University 2019 Commerce Objective / Multiple Choice
Question 6 POST_UTME_BABCOCK_UNIVERSITY • 2019 • COMMERCE • objective

In a perfectly competitive market, the supply curve is perfectly elastic because the firm can freely adjust its output in response to changes in the market price. However, this is not the case in a monopolistically competitive market, where the firm faces a downward-sloping demand curve. What is the primary reason for this difference in supply curve elasticity?

Answer Options

Correct Answer A. The presence of advertising and product differentiation
B. The ability of firms to collude and set prices
C. The presence of barriers to entry
D. The ability of firms to produce at a constant marginal cost
Correct Answer
A
Correct Option:
The presence of advertising and product differentiation

About This Question

This is Post Utme Babcock University 2019 Commerce Question 6. It is one of the objective questions from the 2019 Post Utme Babcock University Commerce examination.

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