Use the following to answer question 45: Figure: Monopolistic Competition Itl Pr

Question

Use the following to answer question 45: Figure: Monopolistic Competition Itl Price of a small pizza $12 10 MC ATC MR 0 2 4 68 10 12 Number of small pizzas irn hundreds) 45. (Figure: Monopolistic Cotmpetition III) The figure Monopolistic Competition III shows the demand, marginal revenue, marginal cost, and average total cost curves for Pat's Pizza Parlor, a monopolistic competitor in the food-to-go industry. In the long run, the demand curve for Pat's Pizza Parlor will shift to the as competitors -the market. A) right; enter B) right; leave C) left; enter D) left; leave 46. In the long run, perfect competitors s and monopolistic competiors are similar in that they A) set price where MR

Explanation / Answer

45> c left enter

Reason

As he is making a profit, new entrants will enter decreasing the demand for him and thus demand curve will shift to the left.

46> B

In the long run, the profit tends towards zero in both the case.

47> True

Brand name itself can create it's own demand due to human psycholofy.

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