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Question 5 0.16 pts Markup would not exist in O a monopoly monopolistic competition. O an oligopoly a cartel. O a competitive market. Question 6 0.16 pts prices than can be reached under perfect competition, Despite monopolistic competition results in any other market. variety than can be reached in O higher; less O more inefficient; more excessive O higher; greater O lower: less O lower: greater Question 7 0.16 pts The mayor of Stockville is seeking reelection and isn't buying into the health food hype. He believes that french fries are necessary for the happiness of his citizens, but the fast-food restaurants in his city are charging too much for their products. In an effort to shore up election support, the mayor institutes a price ceiling on french fries. Within two years, half of the fast food restaurants close in Stockville. What is the likely cause? The price ceiling generated long-run economic losses. O A neighboring town is subsidizing french fry producers. O The price ceiling generated long-run economic profits. A spike in french fry consumption resulted in a long-run decline in health, drastically reducing demand for fast food. O A french fry price ceiling without a proportional hamburger price floor created an untenable production balance

Answer 1

a) "E"

the markup will not exist in the competitive market. it only exist in those market where there are good differentiation and there is no such thing in the perfect competition market.

b) "E" lower and greater, The price in the perfect market is lower but monopolistic market have greater product variety.

c) "A" the price ceiling in the market will generate a loss in the market.

d) "A" less elastic than a perfectly competitive market.