A firm that charges the maximum price without attracting competition from new entrants is
ECONOMICS
JAMB 2015
A firm that charges the maximum price without attracting competition from new entrants is
- A. Oil firms
- B. Monopolistic competitive firm
- C. Monopolistic firm
- D. Perfectly competitive firm
Correct Answer: C. Monopolistic firm
Explanation
Monopolistic firm is characterizes by an industry in which many firms offer products or services that are similar, but not perfect substitutes. Barriers to entry and exit in a monopolistic competitive industry are low, and the decisions of any one firm do not directly affect those of its competitors.
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