Post Utme Esut 2020 Commerce Question 36

Practice objective / multiple choice question 36 from the 2020 Post Utme Esut Commerce examination.

Post Utme Esut 2020 Commerce Objective / Multiple Choice
Question 36 POST_UTME_ESUT • 2020 • COMMERCE • objective

In a perfectly competitive market, the supply curve is downward sloping because of the law of increasing opportunity cost. However, in a monopolistically competitive market, the supply curve is also downward sloping due to the law of diminishing marginal returns. Which of the following best describes the difference between these two market structures?

Answer Options

Correct Answer A. The law of increasing opportunity cost is more relevant in a perfectly competitive market, while the law of diminishing marginal returns is more relevant in a monopolistically competitive market.
B. The law of increasing opportunity cost is more relevant in a monopolistically competitive market, while the law of diminishing marginal returns is more relevant in a perfectly competitive market.
C. The law of increasing opportunity cost is more relevant in both market structures.
D. The law of diminishing marginal returns is more relevant in both market structures.
Correct Answer
A
Correct Option:
The law of increasing opportunity cost is more relevant in a perfectly competitive market, while the law of diminishing marginal returns is more relevant in a monopolistically competitive market.

About This Question

This is Post Utme Esut 2020 Commerce Question 36. It is one of the objective questions from the 2020 Post Utme Esut Commerce examination.

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