One Difference Between Perfect Competition and Monopolistic Competition Is That

question 123

Multiple Choice

One difference between perfect competition and monopolistic competition is that

• A)in perfect competition, firms cannot earn a long-run economic profit
• B)in perfect competition, firms take full advantage of economies of scale in long-run equilibrium; in monopolistic competition, firms do not
• C)only under perfect competition is there ease of entry and exit
• D)in monopolistic competition, the firm's demand curve is horizontal; in perfect competition, the firm's demand curve slopes downward
• E)in perfect competition, there are many firms; under monopolistic competition, there are few firms

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Definitions:

Salvage Value

The presumed value for resale of an asset at life’s operational end.

Depreciation

The methodical reduction of the recorded cost of a fixed asset to allocate its expense over its useful life.

Capital Expenditures

Resources deployed by an organization to buy or enhance hard assets such as premises, manufacturing facilities, or devices.

Revenue Expenditures

Costs that are expensed immediately and relate to the maintenance and repair of fixed assets or to the costs of the goods sold.