Question

The main difference between perfect competition and monopolistic competition is

the number of sellers in the market.

the ease of exit from the market.

the difference in the firm's profits in the long run.

the degree of product differentiation.

Mutual interdependence occurs when

		all firms in an industry are affected by the same macro economic conditions, such as a recession, inflation, interest rates, exchange rates, etc.
		the actions of firms are independent of each other.
		the actions of one firm in an industry are easily recognized and perhaps copied by others.
		monopolists recognize that they must face eventual competition in the long run.

Answer 1

Ques1: Option D is correct. The main difference between Perfect Competition and monopolistic competition is the degree of product differentiation. In perfect competition seller will sell homogenous product whereas in monopolistic competition firm will sell differentiated product in the sense that the product of one firm is differentiated from that of others.

Ques2: Option C is correct. Mutual Interdependence occurs when the action of one firm is dependent on other's firm. Price and output strategy of one firm is dependent on other firm and the same strategy is being adopted by the all the firms.

Note: Kindly hit like and comment for further clarification. Its urgent please hit like.