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24. Consider the case of two restaurants in a community. One is a McDonald's and the other is a Burger King. Also consider the case of a wheat farmer in Nebraska and a wheat farmer in Oklahoma. The restaurants can be considered to be in a monopolistically competitive industry and the wheat farmers in a perfectly competitive industry. Both industries supply food. Why is there a difference? a. Restaurants are a market with a differentiated product, and agriculture is considered in a market with homogenous products. b. Restaurants are in a market with high barriers to entry, and agriculture is in a market with low barriers to entry. C. Both markets are considered industries with asymmetric knowledge (lack of perfect knowledge) of market conditions. In monopolistic competition it is the buyer who has the lack of perfect knowledge, and in perfect competition it is the seller who has the lack of perfect knowledge. d. All of the above

24. Consider the case of two restaurants in a community. One is a McDonald's and the other is a Burger King. Also consider the case of a wheat farmer in Nebraska and a wheat farmer in Oklahoma. The restaurants can be considered to be in a monopolistically competitive industry and the wheat farmers in a perfectly competitive industry. Both industries supply food. Why is there a difference? a. Restaurants are a market with a differentiated product, and agriculture is considered in a market with homogenous products. b. Restaurants are in a market with high barriers to entry, and agriculture is in a market with low barriers to entry. C. Both markets are considered industries with asymmetric knowledge (lack of perfect knowledge) of market conditions. In monopolistic competition it is the buyer who has the lack of perfect knowledge, and in perfect competition it is the seller who has the lack of perfect knowledge. d. All of the above

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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24. Consider the case of two restaurants in a community. One is a McDonald's and the other is a Burger King. Also consider the case of a wheat farmer in Nebraska and a wheat farmer in Oklahoma. The restaurants can be considered to be in a monopolistically competitive industry and the wheat farmers in a perfectly competitive industry. Both industries supply food. Why is there a difference? a. Restaurants are a market with a differentiated product, and agriculture is considered in a market with homogenous products. b. Restaurants are in a market with high barriers to entry, and agriculture is in a market with low barriers to entry. Both markets are considered industries with asymmetric knowledge (lack of perfect c. knowledge) of market conditions. In monopolistic competition it is the buyer who has the lack of perfect knowledge, and in perfect competition it is the seller who has the lack of perfect knowledge. d. All of the above
Transcribed Image Text:24. Consider the case of two restaurants in a community. One is a McDonald's and the other is a Burger King. Also consider the case of a wheat farmer in Nebraska and a wheat farmer in Oklahoma. The restaurants can be considered to be in a monopolistically competitive industry and the wheat farmers in a perfectly competitive industry. Both industries supply food. Why is there a difference? a. Restaurants are a market with a differentiated product, and agriculture is considered in a market with homogenous products. b. Restaurants are in a market with high barriers to entry, and agriculture is in a market with low barriers to entry. Both markets are considered industries with asymmetric knowledge (lack of perfect c. knowledge) of market conditions. In monopolistic competition it is the buyer who has the lack of perfect knowledge, and in perfect competition it is the seller who has the lack of perfect knowledge. d. All of the above
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