Which term best defines the pricing difference between monopolistic competition and competitive markets?
A) differentiation
B) discrimination
C) markup
D) markdown
E) inequity

Question

Quizplus · Accepted Answer

The pricing difference between monopolistic competition and competitive markets is referred to as markup. In monopolistic competition, firms have some degree of market power and are able to charge a markup above their marginal cost due to product differentiation. In a competitive market, firms cannot sustain a markup because there are many substitutes available at the same price.

Which Term Best Defines the Pricing Difference Between Monopolistic Competition