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Economics Model Answers Twelve - 2013 (view source)

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:The correct answer is "C".  A monopolistic competitive firm has the characteristic "P > MC", which is not true for a perfectly competitive firm. A monopolistic competitive firm does not have to repeatedly lower its prices to keep up wih the competition.  
 
:The correct answer is "C".  A monopolistic competitive firm has the characteristic "P > MC", which is not true for a perfectly competitive firm. A monopolistic competitive firm does not have to repeatedly lower its prices to keep up wih the competition.  
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:"A monopolistic competitive firm has the characteristic of P>MC, which is not true for a firm in perfect competition. This characteristic arises because the goods in monopolistic competitive firms are not perfect substitutes, and the price can be set higher than the marginal cost without a loss in revenue."  (by student NL)
    
6.  If you were to loan someone money, why would you want him to pay you something extra (interest) when he pays back the loan?  Give at least one reason.
 
6.  If you were to loan someone money, why would you want him to pay you something extra (interest) when he pays back the loan?  Give at least one reason.
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