How are the fundamental economic questions answered in a market economy?
A) Large corporations alone decide the answers.
B) Households and firms interact in markets to decide the answers to these questions.
C) Individuals, firms, and the government interact in markets to decide the answers to these questions.
D) The government alone decides the answers.
Question 2
Explain the characteristics of monopolistic competition. Explain how price and output are determined in monopolistic competition. Illustrate your answer with a graph.
What will be an ideal response?