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41) Which one of the following characteristics shared by perfect

Question : 41) Which one of the following characteristics shared by perfect : 1418021

 

 

41) Which one of the following characteristics is shared by perfect competition and monopolistic competition?

A) Firms face a downward-sloping demand curve.

B) Profit-maximizing quantity occurs where MC = MR.

C) Long-run equilibrium price equals minimum ATC.

D) Firms make an economic profit in the long run.

E) None of the above.

 

42) Which of the following are true? The similarities between perfect competition and monopolistic competition include:

(1)no barriers to entry.

(2)profit-maximizing output occurs where MC = MR.

(3)long-run economic profit equals zero.

A) (1) only

B) (2) only

C) (1) and (2) only

D) (2) and (3) only

E) (1), (2), and (3)

 

43) Firms in monopolistic competition make zero economic profit in the long run because

A) their costs rise over time.

B) the demand they face decreases as rival firms offer slightly differentiated products for sale in the same market.

C) their marginal cost curves slope upward.

D) the market eventually becomes perfectly competitive.

E) both A and B are correct.

 

44) Choose the correct statement about firms in monopolistic competition.

A) All firms make positive economic profit.

B) The price is set equal to marginal cost to achieve maximum economic profit.

C) Price is lower than in perfect competition.

D) Production always takes place at minimum average total cost.

E) The price is always greater than the marginal cost.

45) Choose the correct statement about firms in monopolistic competition.

A) A firm must lower its price to sell a greater quantity.

B) A firm can never incur an economic loss.

C) Price is never more than marginal cost.

D) Firms offer identical products.

E) The most a firm can make is zero economic profit.

 

46) For a monopolistically competitive firm to be making an economic profit,

A) the production period must be the short run.

B) the production period must be the long run.

C) rival firms must not exist.

D) its rivals must also be making an economic profit.

E) barriers to entry must exist.

 

47) When firms in monopolistic competition incur an economic loss

A) firms enter the industry and produce better products.

B) firms exit the industry, and demand increases for the products of the firms that remain.

C) firms exit the industry, and demand decreases for the firms that remain in the industry.

D) firms enter the industry, and demand increases for the firms that were originally in the industry.

E) the industry will eventually disappear.

 

48) When firms in monopolistic competition make an economic profit

A) firms enter the industry, which increases demand for the product of the firms originally in the market.

B) firms exit the industry, and demand increases for the products of the firms that remain.

C) firms exit the industry, and demand decreases for the firms that remain in the industry.

D) firms enter the industry, and demand decreases for the firms that were originally in the industry.

E) eventually the market will become a monopoly.

 

49) Firms in monopolistic competition have rivals that

A) will always match their price increases.

B) will always match their price decreases but not their price increases.

C) all agree on a common price.

D) set their price where the demand curve is tangent to the average cost curve.

E) set their price according to the demand they face.

50) For a firm in monopolistic competition, the marginal cost curve intersects the average total cost curve

A) at the minimum average total cost.

B) to the left of the minimum average total cost.

C) to the right of the minimum average total cost.

D) at no point.

E) at the same quantity at which the marginal cost curve intersects the marginal revenue curve.

 

 

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