perfect & monopolistic competition

which one of these is NOT an assumption of the monopolistic competition?

• there are many firms

• the firms are relatively small

• the products the firms supply are indistinguishable

In monopolistic competition...

• Allocative efficiency is reached

• Productive efficiency is reached

• Profit is maximized

• All of the answers are correct

In order to increase their profit, the producers in the monopolistic competition...

• can increase their price however they want

• can increase their price to some degree

• can reduce the quantity supplied

• none of the answers are correct

The demand in the monopolistic competition is

• perfectly elastic

• perfectly inelastic

• elastic

• inelastic

In the long-run in monopolistic competition there is

• an abnormal profit

• an equilibrium

• a loss

• it depends on the situation in the short-run

Productive efficiency happens when

• MC = AC

• MC = AR

• MR = AC

When a firm makes an abnormal profit

• MC = MR

• MC = AC

• MC = P

Assumptions about the perfectly competitive market:

• a large number of firms, small firms, homogenous products, free entrance and leave, perfect knowledge

• small firms, homogenous products, free entrance and leave, a large number of large forms

• perfect knowledge, a large number of firms, small firms, homogenous products, free entrance but not leave

Firms cannot maximize profit

• true

• false

Socially optimum level of output

• allocative efficiency

• productive efficiency

• the optimal mix of goods and services