Which of the Following Is True Regarding the Similarities and Differences

question 54

Multiple Choice

Which of the following is true regarding the similarities and differences in monopolistic competition and monopoly?

• A) The monopolist faces a downward-sloping demand curve while the monopolistic competitor faces an elastic demand curve.
• B) The monopolist charges a price above marginal cost while the monopolistic competitor charges a price equal to marginal cost.
• C) The monopolist makes economic profits in the long run while the monopolistic competitor makes zero economic profits in the long run.
• D) Both the monopolist and the monopolistic competitor operate at the efficient scale.

---

Definitions:

Showroom

A space used to display new or featured products for sale, particularly in the automotive, furniture, and fashion industries.

Express Warranty

An explicit guarantee from a seller to a buyer regarding the quality, condition, or performance of a product.

Reliance

The act of depending or trusting in something or someone, often in the context of contracts where one party relies on the promises of another.

Reasonable Person

A hypothetical individual who exercises average care, skill, and judgment in conduct and who serves as a comparative standard for determining liability.