Which of the following assumptions applies to both perfect competition and monopolistic competition?
A)many buyers and few sellers
B)easy entry into the market, but difficult exit from the market
C)profit is maximized at the level of output for which MR = MC
D)firms produce and sell a homogeneous product

Question

Quizplus · Accepted Answer

Both perfect competition and monopolistic competition assume that firms maximize profit at the level of output where marginal revenue (MR) equals marginal cost (MC).

Which of the Following Assumptions Applies to Both Perfect Competition