Question 1 2 pts Fill in the blanks with the answer choices that best answer the

Question

Question 1 2 pts Fill in the blanks with the answer choices that best answer the questions below. Monopolies and monopolistically competitive firms differ in that monopolies r I Select ] OPTIONS FOR QUESTION 1: A) Participate in markets where barriers to entry exist Differentiate their products Face competition from many Firms in monopolistic com petition [Select] B) , which makes monopolistic competition different C) than perfect competition. otherfirms In comparison to oligopolies, firms in monopolistic competition [ Select] Which of the following scenarios is an example of an industry in monopolistic competition? Select ]

Explanation / Answer

1. Option A is correct.

The difference between monopoly and monopolistic competition is that in monopolistic competition there are larger number of buyers and sellers with no barriers to entry and exit. Whereas in monopoly, there is only a single seller with restriction on entry and exit.

2. Differentiate their products.

The only difference between perfect competition and monopolistic competition is that in the latter there is product differentiation where as the former sells homogeneous goods.

graph question :

3. $1250.

At the profit maximising level of output (which is at MR=MC), the AC = 25. AC = total cost/output and hence TC = 25*50 = $1250.

4. $1500.

At profit maximising level of output (where MR=MC) the output is 50 units and the price is $30. Total revenue = 30*50 = $1500.

5. Profit of $250.

Profit = total revenue - total cost.

Profit = 1500 - 1250 = $250.

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