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4 years ago

Which characteristic does monopolistic competition NOT have in common with perfect competition?

Business

1 answer:

OverLord2011 [107]4 years ago

4 0

Answer:

C. Products of individual firms are different.

Explanation:

The monopolistic competition market has many competing sellers and manufacturers (businesses). In this type of market, firms compete by producing substitute (differentiated) goods that can replace each other, while not competing homogeneous goods. The production of differentiated goods gives this market both a competitive and monopolistic feature, but prices cannot be determined by a small number of companies due to the large number of sellers in the market. The important thing in the monopolistic competition market is that the goods are interesting, preferred and indispensable.

Monopolistic competition features:

1) There are many sellers.

2) Differentiated products, products are not exactly the same as in the competitive market.

3) Firms are not determining the price.

4) Each firm has a decreasing demand curve.

5) Companies can enter and leave the market without restrictions. This traffic continues until the profit of the companies becomes worthless.

Perfect competition market; In a market, it is the market where no seller has the power to influence the price of the product he sells. There are very strict conditions for a market to be in perfect competition, and therefore it is difficult to find a full competition market in the real world. In full competition, P = MR = D and parallel to the quantity axis

By saying the Conditions of Perfect Competition Market-perfect competition market is based on four assumptions:

1) There are many buyers and sellers in the market.

2) Homogeneity Condition: Each firm produces and sells the same and homogeneous type product.

3) Mobility Condition: Firms can easily enter and exit the market.

4) Clarity Condition: Buyers and sellers have all the information about the market.

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What type of fiscal policy calls for a decrease in government spending and an increase in taxes?

Sonja [21]

~Hello there! ^_^

Your question: What type of fiscal policy calls for a decrease in government spending and an increase in taxes..?

Your answer: Contractionary is type of fiscal policy for a decrease in the government and an increase in taxes.

The answer is option C.

Hope this helps!

7 0

3 years ago

Phillips Enterprises Inc. is expected to pay a dividend of $2.60 next year. Dividends are expected to grow at a constant rate of

Sergeu [11.5K]

Answer:

Cost of internal equity =21%

Cost of external Equity =23.29%

Explanation:

Using the constant growth model:

$Po=\frac{D1}{ke-g}$

if ke is made subject of formula then the cost of internal equity ke is calculated as follows:

$ke=\frac{D1}{Po}+g$ = $\frac{2.60}{20}+0.08$ = 21%

If external equity is to be used, that means that the company will have to issue share to get a fresh infection of capital into the company, and is thus likely to face flotation costs. the company will receive a net of $20 minus flotation costs for every share sold.

$Po(1-f)=\frac{D1}{ke-g}$

If ke is made subject of formula then the cost of external equity ke is calculated as follows:

$ke=\frac{D1}{Po(1-f)}+g$ = $\frac{2.60}{20(1-0.15)}+0.08$ = 23.29%

3 0

4 years ago

4. The great economist Joseph Schumpeter coined the term ""creative destruction"" to characterize the free market economy. Why s

strojnjashka [21]

Answer:

As the competition progress, certain corporations or firms can have competitive advantages that allows them to excel in the process of production and lower the costs while introducing new innovative technologies with the help of economies of scales.

This can lead to monopolies that eventually exploit the customers and harm the environment and communities around them. It is because of this, that the free trade and free market have to be promoted and protected by the government.

Explanation:

4 0

4 years ago

A company must decide if it will make or buy an item it needs. The company can make the item for $10 per unit, but must invest $

Bezzdna [24]

Answer:

The correct answer is A.

Explanation:

Giving the following information:

Unitary variable cost= $10

Total fixed costs= $15,000

Selling price= $12

The break-even point analysis shows the number of units required to cover for the fixed costs.

To calculate the break-even point in units, we need to use the following formula:

Break-even point= fixed costs/ contribution margin

Break-even point= 15,000/ (12 - 10)= 7,500 units

5 0

4 years ago

Read 2 more answers

You plan to purchase a $350,000 house using either a 30-year mortgage obtained from your local savings bank with a rate of 8.20

Digiron [165]

Answer:

* The option of mortgage obtained at the rate of 8.20%:

+ Principal paid: $280,000

+ Interest paid: $473,735.6

* The option of mortgage obtained at the rate of 7.20%:

+ Principal paid: $280,000

+ Interest paid: $178,658

Monthly payment for the option of mortgage obtained at the rate of 8.20%: $2.093.71

Monthly payment for the option of mortgage obtained at the rate of 7.20%: $2,548.1

The difference on monthly payment between the two option is: $454.39

Explanation:

For both options, we will have to borrow 80% of the house's price because the down payment is 20% or we have to borrow 350,000 x 80% = $280,000 => The principal needs to be paid for two options is the same, $280,000.

<u>* For option of mortgage obtained at the rate of 8.20%:</u>

We apply the present value of annuity formula to find the interest rate paid and monthly payment with discount rate of 8.2%/12 and discounting period of 12*30 = 360

we have: 280,000 = PMT/(8.2%/12) * [ 1 - (1+8.2%/12)^-360] <=> PMT = $2.093.71

=> There is a total of 2.093.71 x 360 = $753,735.6 repayment has been made, with $280,000 is for principal repayment => Interest expenses paid = 753,735.6 - 280,000 = $473,735.6.

<u>* For option of mortgage obtained at the rate of 7.20%:</u>

We apply the present value of annuity formula to find the interest rate paid and monthly payment with discount rate of 7.2%/12 = 0.6% and discounting period of 12*15 = 180

we have: 280,000 = PMT/(0.6%) * [ 1 - (1+0.6%)^-180] <=> PMT = $2,548.1

=> There is a total of 2,548.1 x 180 = $458,658 repayment has been made, with $280,000 is for principal repayment => Interest expenses paid = 458,658 - 280,000 = $178,658.

8 0

3 years ago

Read 2 more answers