The Most Significant Difference Between Perfect Competition and Monopolistic Competition

question 60

Multiple Choice

The most significant difference between perfect competition and monopolistic competition is that

• A) in a perfectly competitive market products are differentiated, while in a monopolistically competitive market products are homogeneous.
• B) in a perfectly competitive market products are homogeneous, while in a monopolistically competitive market products are differentiated.
• C) in a perfectly competitive market there is a large number of sellers, while in a monopolistically competitive market there is a small number of sellers.
• D) in a perfectly competitive market there is a small number of sellers, while in a monopolistically competitive market there is a large number of sellers.

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Definitions:

Occupational Safety Laws

Regulations designed to ensure safe and healthy working conditions for employees by setting and enforcing standards.

Regulatory Requirements

Rules and regulations that entities must follow, often set by government agencies, to operate legally or to enter specific markets.

Economic Profit

The difference between a firm's total revenues and its total costs, including both explicit and implicit costs.

Price-Taker Market

A price-taker market is one in which individual buyers and sellers have no control over the price of a product and must accept the prevailing market price.