Question

Which of the following statements correctly compare monopoly and monopolistic competition market structures?

O Both have more than one firm in the industry.
O Both have the marginal revenue curve below the demand curve.
O Both sell a product that is differentiated.
O Both earn long-run economic profits.
O Both operate in the long run at their minimum points of their ATC curves.

Answer 1

B. Both have Marginal Revenue Curves below Demand Curve

Step-by-step explanation:

Monopoly ,Monopolistic Competition market structures are Imperfect Market Structures . So , unlike Perfect Competition (very large no of buyers selling same product at same price facing perfectly inelastic i.e horizontal demand /AR = MR curve), they both have normal downward sloping demand/AR curve (as per law of demand) & MR curve lies below it .

Monopolies are single seller of the product , the question of product differentiation does not arise . So , the other points are unvalidated