monopolistic competiton

Which of the following statements correctly identifies a difference between perfect competition and monopolistic competition?

• In perfect competition there are no barriers to entry, but there are strong barriers in monopolistic competition.

• In perfect competition the firms all sell products that are exactly the same, but in monopolistic competition each firm sells a slightly differentiated product.

• In perfect competition there are many firms, but in monopolistic competition there are only a few firms.

• In perfect competition there are few consumers, but in monopolistic competition there are many consumers.

Which of the following market structures results in allocative efficiency?

• Monopoly

• Monopolistic Competition

• Perfect Competition

• Oligopoly

Which is true of a monopolistically competitive firm in long-run equilibrium?

• Price equals average total cost but is greater than marginal cost.

• Price equals marginal cost and average total cost.

• Price equals marginal cost and is greater than average total cost.

• The firm earns positive economic profits by producing at minimum average cost.

The demand curve is downward sloping because:

• there are a large number of firms

• the product is produced by using scarce resources

• it is easy for firms to enter or exit the market

• the products produced by different firms are not identical

which of the following is true considering Monopolisticcompetitive?

• In long-run equilibrium, average total costs are minimized.

• In long-run equilibrium, the price is greater than the marginal cost.

• In long-run equilibrium, the firm is earning economic profits.

• In long-run equilibrium, the marginal benefit exceeds the price charged by the firms.

The graph shows a monopolistically competitive firm:

• making a profit in the long-run

• incurring a loss in the short-run

• making a profit in the short-run

• breaking even in the long-run

In the long-run, the ATC will be tangent to the demand curve at:

• Q3

• Q1

• NONE

• Q2

Firms in monopolistic competition can leave the market easily in the long run

• TRUE

• FALSE

Which of the following is true about monopolistic competition

• all products are the same in the market

• barriers to entry into the market are low

Which of the following has the most number of firms?

• monopoly

• oligopoly

• monopolistic competition

• perfect competition