One Difference Between Perfect Competition and Monopolistic Competition Is That

Multiple Choice

One difference between perfect competition and monopolistic competition is that _____

A) firms in perfect competition cannot earn a long-run economic profit, whereas firms in monopolistic competition can earn a long-run economic profit.
B) firms in perfect competition take full advantage of economies of scale in long-run equilibrium, whereas firms in monopolistic competition do not take advantage of economies of scale in long-run equilibrium.
C) firms in perfect competition can easily exit the market, whereas firms in monopolistic competition find it difficult to exit the market.
D) firms in perfect competition face a downward-sloping demand curve, whereas firms in monopolistic competition face a horizontal demand curve.
E) there are many firms in a perfectly competitive market, whereas there are a few firms in a monopolistically competitive market.