Please give a short 1 line explanation... Please give a short 1 line explanation
ID: 1243927 • Letter: P
Question
Please give a short 1 line explanation...
Please give a short 1 line explanation...
A significant difference between monopoly and perfect competition is that: free entry and exit is possible in a monopolized industry but impossible in a competitive industry. competitive firms control market supply, but monopolies do not. the monopolist's demand curve is the industry demand curve, while the competitive firm's demand curve is perfectly elastic. profits are driven to zero in a monopolized industry, but may be positive in a competitive industry.Explanation / Answer
1.) A.) It is economies of scale because it shows that if you increase the inputs a certain percentage (in this case designing more parts of the car), you increase the output by a greater percentage (shown by the price going down). In diseconomies of scale, the car would cost more, and in constant returns to scale, the car would cost the same. And diminishing marginal product is not relevant to the question.
2.) D.) In a competitive market, we can assume that every product is identical, which we cannot assume on eBay. A is wrong because in a perfectly competitive market, there is an infinite number of sellers, because no single seller can affect the price. In this way, eBay is like a competitive marketplace. B is wrong because those small sellers cannot affect the market. And C is wrong because entry into the market should be easy in a competitive market.
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