The figure given below shows the revenue and cost curves of a monopolistically competitive firm.Figure 12.4
MR: Marginal revenue curve
ATC: Average total cost curve
MC: Marginal cost curve
-Which of the following is not an example of nonprice competition?
A)Kellogg's introduces Froot Loops with Lemonberry Swirls.
B)Sterling Planet provides consumers the opportunity to purchase renewable electricity in upstate New York.
C)Mountain Dew sells "Livewire" orange soda in the summer of 2003.
D)Nissan lowers the interest rate charged for new automobile financing.
E)Honda produces a hybrid version of its Civic.

Question

The figure given below shows the revenue and cost curves of a monopolistically competitive firm.Figure 12.4
  MR: Marginal revenue curve
ATC: Average total cost curve
MC: Marginal cost curve
-Which of the following is not an example of nonprice competition?
A)Kellogg's introduces Froot Loops with Lemonberry Swirls. 
B)Sterling Planet provides consumers the opportunity to purchase renewable electricity in upstate New York. 
C)Mountain Dew sells "Livewire" orange soda in the summer of 2003. 
D)Nissan lowers the interest rate charged for new automobile financing. 
E)Honda produces a hybrid version of its Civic.

Quizplus · Accepted Answer

Nonprice competition refers to competition based on factors other than price, such as product differentiation, advertising, and promotions. Option D, which involves lowering the interest rate for new automobile financing, is an example of price competition, as it directly relates to the cost of the product. Options A, B, C, and E are all examples of nonprice competition, as they involve differentiating the product in some way or offering unique features, rather than simply lowering the price.

The Figure Given Below Shows the Revenue and Cost Curves