01:19:54 v 1st attempt Compare a perfectly competitive market with a monopolisti

Question

01:19:54 v 1st attempt Compare a perfectly competitive market with a monopolistically competitive market. How do the outcomes differ? AThe markup the firm charges in a monopolistically competitive market is competitive market the markupcharged by a firm in a perfectly reater than greater than less than equal to B. The price the firm charges to consumers in a monopolistically competitive perfectly competitive market the price charged by a firmina C The firm's excess capacity in a monopolistically competitive market is competitive market the firm's excess capacity in a perfectly D. The average total cost of production in a monopolistically competitive market is production in a firm in a perfectly competitive market the average total cost of E The amount of advertising purchased by a firm in a monopolistically competitive market is advertising purchased by a firm in a perfectiy competitive market the amount of F inthe long run, the firm's profit in a monopolistically competitive market is competitive market the firm's profit in a perfectly

Explanation / Answer

A. The markup the firm charges in a monopolistically competitive market is greater than the markup charged by a firm in a perfectly competitive market.

As the products in a monopolistic competitive market is unique than the competitors , so each competitor charges a higher markeup.

B. The price the firm charges to consumers in a monopolistically competitive market is greater than the price charged by a firm in a perfectly competitive market.

As the firms in a monopolistically competitive market produce unique products,so they have a privilige tocharge higher price than perfect competitive market.

C. The firm's excess capacity in a monopolistically competitive market is greater than the firm's excess capacity in a perfectly competitive market.

Firm's profit maximizing output is less than the output associated with minimum average cost and thus in the long run the firm has excess capacity.

D. The average total cost of production in a monopolistically competitive market is greater than the  average total cost of production in a firm in a perfectly competitive market.

Firm's profit maximizing output is less than the output associated with minimum average cost and thus the average total cost of production is higher in monopolistically competitive market.

E. The amount of advertising purchased by a firm in a monopolistically competitive market is greater than the amount of advertising purchased by a firm in a perfectly competitive market.

As the products produced by monopolistically competitive firm is different from each other,so the amount of advertising is greater than perfectly competitive market.

F. In the long run, the firm's profit in a monopolistically competitive market is greater than the firm's profit in a perfectly competitive market.

Due to high price charged and high mark up price , in the long run firms in a monopolistically competitive market is higher than the perfectly competitive market.

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