Which of the following is a distinction between perfectly competitive and monopolistic competition?
a. Perfectly competitive firms must compete with rival sellers; monopolistically competitive firms do not confront rival sellers.
b. Monopolistically competitive firms can raise their price without losing sales; perfectly competitive firms must lower their price in order to sell more of their product.
c. Perfectly competitive firms confront a perfectly elastic demand curve; monopolistically competitive firms face a downward-sloping demand curve.
d. Perfectly competitive firms may make either economic profits or losses in the short run, but monopolistically competitive firms always earn an economic profit.
c
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The benefit from an additional unit of a good or service that the consumer of that good or service receives is the
A) marginal private benefit. B) marginal external benefit. C) marginal social benefit. D) opportunity cost.
If, under a fixed exchange rate system, the dollar price of a Mexican peso is below its equilibrium level, then the
A) dollar is overvalued. B) peso is overvalued. C) dollar has depreciated. D) peso has appreciated.