Question 38 1 pts In monopolistic competition, the end result of entry and exit

Question

Question 38 1 pts In monopolistic competition, the end result of entry and exit is that firms end up with a price that lies average cost curve. O at the very bottom of the AC curve. O at the very top of the AC curve. O on the downward-sloping portion of the average cost curve D Question 39 1 pts Monopolistic competition is different from perfect competition in that monopolistically competitive markets O feature only price competition. O feature free entry and exit of firms from the industry in the short-run. O feature free entry and exit of firms from the industry in the long-run. O feature competition based upon things other than price.

Explanation / Answer

38) In monopolistic competition, the end result of entry and exit is that firms end up with a price that lies

on the downward slopping portion of the average cost curve

Explanation :In monopolistic compettion economic profits can be made in short run but in long run the entry and exit of the firms will drive them to maximum profits. Here, the prices will not be productively efficient as the end result of entry and exit is that firms end up with a price that lies on the downward slopping portion of the average cost curve , not at the bottom of the curve.

39.) Monopolistic competition is different from perfect competition in that monopolistically competitive markets :

feature competition based upon things other than price

Explanation : In monopolistic competition the pricces of the rival competitors are taken into account rather than its own prices, thus it features compettion based upon things other than price as it has to exist in the market and depends upon the competitors performance.

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