Given the characteristics: (1) many buyers and sellers, (2) free entry and exit, (3) perfect information, and (4) heterogeneity of products, monopolistic competition and perfect competition share

1) many buyers and sellers, (2) free entry and exit

Explanation:

A monopolistic competition is when there are many buyers and sellers of heterogeneous goods and services. There are free entry of firms into and out of the industry. Firms set the price for their products. Buyers and sellers do not have perfect information. In the long run, monopolistic competition make zero economic profit.

A pure competition is characterised by many buyers and sellers of homogenous goods and services. Buyers and sellers have perfect information. There are no barriers to entry or exit of firms in the industry. Market price is set by the market forces. Firms make zero economic profit in the long run.

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(a) Per unit material cost.

total cost of the mine = $1,190,000 (purchase cost) + $90,000 (restoration costs) + $200,000 (development costs) - $100,000 (salvage value) = $1,380,000

estimated tons of minerals = 60,000 tons

cost per ton = $1,380,000 / 60,000 tons = $23 per ton

(b) Total material cost of December 31, 2017, inventory

during 2017 extracted 30,000 tons and sold 22,000 tons, so the total inventory = (30,000 tons - 22,000 tons) x $23 per ton = $184,000

(c) Total material cost in cost of goods sold at December 31,

since the company sold 22,000 tons, the COGS = 22,000 tons x $23 per ton = $506,000