31) Refer to Figure 14.2.4. The figure represents a monopolistically : 1418020
31) Refer to Figure 14.2.4. The figure represents a monopolistically competitive firm in short-run equilibrium. What is the firm's level of output?
32) Refer to Figure 14.2.4. The figure represents a monopolistically competitive firm in short-run equilibrium. What price does the firm charge?
33) Refer to Figure 14.2.4. The figure represents a monopolistically competitive firm in short-run equilibrium. In the long run,
A) new firms enter, and each existing firm's demand curve shifts leftward.
B) new firms enter, and each existing firm's demand curve shifts rightward.
C) existing firms exit, and each remaining firm's demand curve shifts leftward.
D) existing firms exit, and each remaining firm's demand curve shifts rightward.
E) the equilibrium is the same as in the short run.
34) In the long run, a monopolistically competitive firm produces the output at which price equals
A) marginal cost.
B) marginal revenue.
C) average variable cost.
D) average total cost.
E) B and D.
35) Consider a monopolistically competitive industry in long-run equilibrium. Suppose there is a large increase in wages that raises the costs for all firms. What happens within each firm in the short run?
A) They will be forced to close down due to the excess costs.
B) They will continue producing as before, cushioned by their previous excess profits.
C) They will expand output and try to make up for lost profits.
D) They will lower prices and try to steal customers away from their rivals.
E) They will decrease production and produce the quantity at which marginal revenue equals the new (higher) marginal cost curve; this means a rise in price.
36) Under monopolistic competition, long-run economic profit is zero because of
A) product differentiation.
B) no barriers to entry.
C) excess capacity.
D) economic inefficiency.
E) the downward-sloping demand curve facing each firm.
37) In the long run, a monopolistically competitive firm will make the same economic profit as
A) a monopolistically competitive firm in the short run.
B) a single-price monopoly.
C) a price-discriminating monopoly.
D) a perfectly competitive firm in long-run equilibrium.
E) none of the above.
38) Which one of the following is true for perfect competition, monopolistic competition, and single-price monopoly?
A) Each firm produces an identical good.
B) Each firm makes zero long-run economic profit.
C) The profit maximizing quantity occurs at the quantity at which MC = MR.
D) Easy entry and exit.
E) None of the above.
39) In the long run, the firm in monopolistic competition
A) faces a perfectly elastic demand.
B) produces more than the quantity at minimum ATC.
C) produces less than the quantity at minimum ATC.
D) produces the quantity at minimum ATC.
E) makes an economic profit.
40) Which one of the following characteristics is not shared by single-price monopoly and monopolistic competition?
A) Firms face a downward-sloping demand curve.
B) Profit-maximizing quantity occurs where MC = MR.
C) Price charged is the highest consumers are willing to pay.
D) Firms make an economic profit in the long run.
E) The marginal revenue curve lies below the demand curve.