6. The difference between monopolistic competition and perfect competition is that: A) in monopolistic competition firms have some market power and in perfect competition they do not have any market power. B) in monopolistic competition firms do not have any market power and in perfect competition they do. C) in monopolistic competition firms charge price above marginal cost, and in perfect competition they charge price that exactly equals the marginal cost. D) There are no differences. E) Both a and c are correct. True/false questions 1. The minimum efficient scale (or economies of scale) can be an entry barrier for new firms in certain industry. A) True B) False 2. At the profit maximising level of output for the monopolist, price is greater than marginal cost. A) True B) False 3. In monopolistic long-run equilibrium, firms face excess capacity (i.e. production is lower than their production capacity). A) True B) False 4. Firms in oligopoly are price setters. A) True B) False 5. A key difference between oligopoly, and other types of market structure is a consideration of strategic interdependence. A) True B) False