The Key Difference(s) Between Perfect Competition and Monopolistic Competition Is

question 65

Multiple Choice

The key difference(s) between perfect competition and monopolistic competition is:

• A) that a monopolistically competitive firm is a price taker, whereas a perfectly competitive firm is a price maker.
• B) that a monopolistically competitive firm is a price maker, the same as a perfectly competitive firm is a price maker.
• C) that a monopolistically competitive firm can raise its price and still retain some
• Customers.
• D) that if a monopolistically competitive firm raises its price it will lose all customers.

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Definitions:

Social Security Surplus

The excess funds collected through Social Security taxes over the amounts paid out as benefits.

Billion

A numerical value equivalent to 1,000 million, often used to denote a very large quantity or amount in financial and statistical contexts.

Opportunity Costs

The loss of potential gain from other alternatives when one alternative is chosen, representing the benefits one misses out on when making a decision.

Excess Capacity

Excess capacity refers to a situation where a company is operating below its maximum output level, indicating that it can produce more with the current resources if there is higher demand.