Question

For each of the following characteristics, indicate whether it describes a perfectly competitive firm, a monopolistically competitive firm, both, or neither. (Note: If the characteristic describes neither, leave the entire row unchecked.) A. sells a product differentiated from that of itscompetitorsB. has marginal revenue less than priceC. earns economic profit in the long runD. produces at the minimum of average total cost inthe long runE. equates marginal revenue and marginal costF. charges a price above marginal cost

Answer 1

Answer: A monopolistically competitive

B. Monopolistically competitive

C. Neither

D. Both

E. Both

F. Monopolistically competitive

Explanation:

perfectly competitive firm is a firm which is a price taker, it can not by itself change price but must accept equilibrium price at which it sells it goods and services.

Monopolistically competitive firm takes the price of it competitors and ignores it own price effect on others . examples are fast food, restaurants and hotels .