Question

A monopolistically competitive firm usually charges more than a perfectly competitive firm because:_____.

a. it is part of a group of firms that has formally agreed to control the price and the output of a product.
b. its primary goal is to reap monopoly profits by replacing competition with cooperation.
c. producing homogenous output is more expensive than producing differentiated output.
d. producing differentiated output is more expensive than producing homogenous output.
e. it has a monopoly, but potential entrants exist in the form of contestable markets.

Answer 1

a. it is part of a group of firms that has formally agreed to control the price and the output of a product.

Step-by-step explanation:

A monopolistic competitive firm ensures that, the price of goods and the output of the products produced by them is controlled. This helps them to dictate the market in which they find themselves in.