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Product Differentiation Often Gives a Producer Only a Small Amount

Question 15

Multiple Choice

Product differentiation often gives a producer only a small amount of monopoly power because


A) there can be little or no substitution between product groups.
B) the monopolistic competitor faces a downward-sloping demand curve.
C) the presence of excess capacity gives the producer some freedom to vary output.
D) the product may be unique, but close substitutes are available.
E) the industry is difficult to define and hence cannot be regulated.

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