One Difference Between Perfect Competition and Monopolistic Competition Is That

question 120

Multiple Choice

One difference between perfect competition and monopolistic competition is that _____

• A)firms in perfect competition cannot earn a long-run economic profit, whereas firms in monopolistic competition can earn a long-run economic profit.
• B)firms in perfect competition take full advantage of economies of scale in long-run equilibrium, whereas firms in monopolistic competition do not take advantage of economies of scale in long-run equilibrium.
• C)firms in perfect competition can easily exit the market, whereas firms in monopolistic competition find it difficult to exit the market.
• D)firms in perfect competition face a downward-sloping demand curve, whereas firms in monopolistic competition face a horizontal demand curve.
• E)there are many firms in a perfectly competitive market, whereas there are a few firms in a monopolistically competitive market.

---

Definitions:

Venture Capital

Funding provided by investors to startups and small businesses that have a high potential for long-term growth.

Funding Stages

The various phases of financial support provided to startups and businesses, which typically progress from seed funding to later-stage investments.

Dutch Auction IPO

A method of initial public offering in which the price of the shares is determined after taking in all bids and finding the highest price at which the total offering can be sold.

Private Placements

The sale of securities to a relatively small number of select investors as a way of raising capital.