Title: QUIZ: Introduction to Monopolistic Competition
Course: Recommended Resources for AP Micro from FRE > Section: Unit 4: Imperfect Competition

Q: What is monopolistic competition?
- A market where producers sell identical products
- A market dominated by a few large firms selling identical products
- A market where producers sell similar but not identical products
- A market with no competition and only one seller
A: A market where producers sell similar but not identical products

Q: What is the outcome of a firm’s price and quantity decisions in a monopolistic competition market when compared to a perfectly competitive market?
- Lower price and higher quantity
- Higher price and lower quantity
- Same as perfect competition
- No control over price and quantity
A: Higher price and lower quantity

Q: What is the outcome of a firm’s price and quantity decisions in a monopolistic competition market when compared to a monopoly?
- Lower price and higher quantity
- Higher price and lower quantity
- Same as a monopoly
- No control over price and quantity
A: Lower price and higher quantity

Q: Why is advertising important in monopolistic competition?
- Advertising increases economies of scale.
- Advertising highlights product uniqueness.
- Advertising lowers price.
- Advertising increases market barriers.
A: Advertising highlights product uniqueness.

Q: Which of the following is a characteristic of monopolistic competition markets?
- They typically involve natural resources.
- The government usually regulates these markets.
- It is easy to enter and exit the market.
- There is little to no competition.
A: It is easy to enter and exit the market.