iple Choice t compleres thetatmet or nsia Identify the choice that best he monop
ID: 1143009 • Letter: I
Question
iple Choice t compleres thetatmet or nsia Identify the choice that best he monopolistic competition market structure is characterized by: a. few firms and similar products. b. many firms and differentiated products c. many firms and a homogeneous product. d. few firms and a homogeneous product. 1. T 2. Wh ich of the following is the best example of a monopolistically competitive market? a. Wheat. b. Automobiles. c. Diamonds. d. Retail sales. uct differentiation makes the demand for a monopolistically competitive firm's product: a. perfectly elastic. b. more elastic than for a monopoly c. more inelastic than for a monopoly. d. perfectly inelastic. theory of monopolistic competition predicts that in long-run equilibrium a monopolistically competitive firm will: 4. T a produce the output level at which price equals long-run marginal cost. b. operate at minimum long-run average cost. c. overutilize its insufficient capacity. d. produce the output level at which price equals long-run average cost. 5. A monopolistic competitive firm is inefficient because the firm: a. earns positive economic profit in the long run. b. is producing at an output corresponding to the condition that marginal cost equals price c. is not maximizing its profit. d. produces an output where average total cost is not minimum. Firms in a monopolistically competitive market structure maximize their profit by producing an output where: a. price equals average total cost. b. marginal cost equals average total cost. c. marginal cost equals price. 6. d. marginal revenue equals marginal cost.Explanation / Answer
Answer 1: Option B is correct. Monopolistic Competition market is structure by many firms in the market selling slightly different product.
Answer 2 : Option D is correct. Retail sales is an example of monopolistic competition.
3: option B is correct product differentiation make the demand more elastic than in a monopoly.
4: option D is correct. Theory of monopolistic competition project that in the long run equilibrium in monopolistic competition form which produce price equal to long run average cost.
5 : optionD is correct a monopolistic competition is considered inefficient because the firm produces an output where average total cost is not minimum.
6 : optiondee is correct where MR is equal to MC.Here , firm in an Monopolistic competition makes maximum output where MR= MC.
7 : option B is correct in long run surviving firm in monopolistic competition on zero pure economic profit. As in Monopolistic competition they are able to earn zero pure Economic profit.
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