For a monopolistic competitive firm:
a) price is less than marginal revenue at all levels of output.
b) price is greater than marginal revenue at all levels of output except for the first unit.
c) price equals marginal revenue at all levels of output.
d) the demand curve is perfectly inelastic and marginal revenue is zero.
A market structure, that combines some features of monopoly and perfect competition, is monopolistic competition. The monopolistic feature of this market structure is the relative price control. On the other hand, the features that it shares with the perfect competition are a large number of suppliers and free entry into the market.
Answer and Explanation: 1
- The correct answer is b) price is greater than marginal revenue at all levels of output except for the first unit.
A monopolistic competitive firm is...
See full answer below.
Become a member and unlock all Study Answers
Start today. Try it nowCreate an account
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
fromChapter 3 / Lesson 56
Learn the monopolistic competition definition with examples. Study monopolistic competition vs. perfect competition and other market types to learn the differences.