2. Product differentiation in monopolistic competition Consider two gas stations. One is located at a major intersection used by people commuting from populous neighborhoods to jobs located in the downtown area. The other is located on the outskirts of the city. Both gas stations sell high-grade or premium-grade gas for a higher price than low- grade or regular-grade gas. However, the gas station along the more congested route charges higher gas prices for all grades than the station on the outskirts of town. These gas stations offer product differentiation based on which of the following? Check all that apply. Location Quality Style True or False: Positive short-run profit can occur as a result of advertising in a monopolistically competitive market. True False
2. Product differentiation in monopolistic competition Consider two gas stations. One is located at a major intersection used by people commuting from populous neighborhoods to jobs located in the downtown area. The other is located on the outskirts of the city. Both gas stations sell high-grade or premium-grade gas for a higher price than low- grade or regular-grade gas. However, the gas station along the more congested route charges higher gas prices for all grades than the station on the outskirts of town. These gas stations offer product differentiation based on which of the following? Check all that apply. Location Quality Style True or False: Positive short-run profit can occur as a result of advertising in a monopolistically competitive market. True False
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter10: Monopolistic Competition And Oligopoly
Section: Chapter Questions
Problem 11PAE
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Transcribed Image Text:2. Product differentiation in monopolistic competition
Consider two gas stations. One is located at a major intersection used by people commuting from populous neighborhoods to jobs located in the
downtown area. The other is located on the outskirts of the city. Both gas stations sell high-grade or premium-grade gas for a higher price than low-
grade or regular-grade gas. However, the gas station along the more congested route charges higher gas prices for all grades than the station on the
outskirts of town.
These gas stations offer product differentiation based on which of the following? Check all that apply.
Location
Quality
Style
True or False: Positive short-run profit can occur as a result of advertising in a monopolistically competitive market.
True
False
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