1. Advertising is an economically productive activity and NOT a waste of resourc

Question

1. Advertising is an economically productive activity and NOT a waste of resources because: advertisements increase sales. advertisements can convey information about the product. advertisements can signal that firms are desperate for customers. advertising can decrease the costs of production. 2. Because a monopolistically competitive firm faces a downward-sloping demand curve for its product, its price will be: equal to marginal revenue. less than marginal revenue. greater than marginal revenue. equal to total revenue. 3. Figure: Possible Long-Run Outcome __(Figure: Possible Long-Run Outcome) Examine the figure Possible Long-Run Outcome. In the figure, which price and quantity refer to a potential long-run profit maximizing outcome for a firm producing in a monopolistically competitive market? P1 and Q3 P1 and Q1 P2 and Q2 P1 and Q4

Explanation / Answer

1.B

2.C

3.A

4.C

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