A Monopolistically Competitive Firm Differs from a Perfectly Competitive Firm

question 212

Multiple Choice

A monopolistically competitive firm differs from a perfectly competitive firm in the long run in that

• A) the demand curve faced by a monopolistically competitive firm is downward sloping, while the demand curve faced by a perfectly competitive firm is horizontal.
• B) profits are positive for a monopolistically competitive firm and zero for a perfectly competitive firm.
• C) profits are zero for a monopolistically competitive firm and positive for a perfectly competitive firm.
• D) marginal cost equals the market price for a monopolistically competitive firm but not for a perfectly competitive firm.

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