Question

The concept of markup under monopolistic competition would best be described as the attempt of firms to make their products look like those of other firms in the industry, thus "marking them up" in a similar style.
a. difference between the marginal cost and the price of the monopolistic competitor.
b. difference between total revenue and total cost of the monopolistic competitor
c. difference between the average total cost and the price of the monopolistic competitor.
d. attempt of firms to mark up their prices above those of their rivals.

Answer 1

Answer:

The correct answer is the option A: Difference between the marginal cost and the price of the monopolistic competitor.

Explanation:

To begin with, the concept known as "Markup" in the field of business and economics refers to the difference in the price and the cost of a good that is able to sale. Moreover, the "markup" is added into the total cost of the production of the good in order to obtain a profit for the sale of that good, so therefore that it implicates the percentage that the producer gains for selling his product to a consumer. So that is why this concept is understood as that difference comprehended between the sale price and the cost of the good produced.