95) A monopolistically competitive firm differs from a perfectly competitive fir

Question

95) A monopolistically competitive firm differs from a perfectly competitive firm in the long run in9s) 98) that A) profits are positive for a monopolistically competitive firm and zero for a perfectly B) profits are zero for a monopolistically competitive firm and positive for a perfectly C) the demand curve faced by a monopolistically competitive firm is downward sloping while D) marginal cost equals the market price for a monopolistically competitive firm but not for a competitive firm. competitive firm. the demand curve faced by a perfectly competitive firm is horizontal. perfectly competitive firm.

Explanation / Answer

Answer
Option C
the monopolistic competitive firms demand curve is downward sloping because the monopolistic market have the differentated product and perfect competitive firm have horizontal demand curve because the product is identical to the market.

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