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Question 1: Question requires complete understanding of interactions between production and profit maximization. Be careful with the IF-THEN statement.

If a competitive firm minimizes its cost of production subject to output, it then maximizes economic profit. True or false and explain in detail.

Question 2: In an oligopolistic market, firms pay close attention to the strategies of their rivals. In monopolistic competition, with a large number of sellers, it is assumed that there is not this kind of rivalry, or interdependence. Why is there probably some rivalry in many monopolistically competitive markets?

Business Management, Management Studies

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