A firm in a monopolistically competitive market is similar to a monopoly in the sense that (i) they both face downward-sloping d

Question

3 years ago

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A firm in a monopolistically competitive market is similar to a monopoly in the sense that (i) they both face downward-sloping d

emand curves. (ii) they both charge a price that exceeds marginal cost. (iii) free entry and exit determines the long-run equilibrium. a. (i) only b. (ii) only c. (i) and (ii) only d. (i), (ii), and (iii) only

Business

1 answer:

Alik [6] · Answer 1 · 2022-01-28T16:43:57+03:00

Answer:

c. (i) and (ii) only

Explanation:

Monopolistic competition characterizes 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.

A monopoly is a market situation in which there is only one seller of a product which has no close substitute. It is a market in which one firm has the prevailing power in the industry.

A firm in a monopolistically competitive market is similar to a monopoly in the sense that (i) they both face downward-sloping demand curves. (ii) they both charge a price that exceeds marginal cost.