If a Perfectly Competitive Firm and a Monopolistic Competitive Firm

question 117

Multiple Choice

If a perfectly competitive firm and a monopolistic competitive firm face the same demand and cost curves, then

• A)the perfectly competitive firm will attain resource-allocative efficiency, but the monopolistic competitive firm will not.
• B)the perfectly competitive firm will attain resource-allocative efficiency, but the monopolistic competitive firm may or may not, depending upon the demand for its product.
• C)the perfectly competitive firm will not attain resource-allocative efficiency, but the monopolistic competitive firm will.
• D)both the perfectly competitive firm and the monopolistic competitive firm will attain resource-allocative efficiency.
• E)neither the perfectly competitive firm nor the monopolistic competitive firm will attain resource-allocative efficiency.

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Definitions:

Chondrocostal

Pertaining to the cartilage and ribs, often used to describe the connection between rib cartilage and the ribs themselves.

Cost

The amount of money required to purchase something or the expenditure incurred by a business in producing goods or services.

Inflammation

The body's protective response to injury or damage, marked by redness, heat, swelling, and pain, aimed at eliminating harmful stimuli and initiating healing.

Arthritis

A group of painful and degenerative conditions marked by inflammation in the joints that causes stiffness and pain.