2.1 In the short run, monopolistically competitive firms: a) charge a price equal to marginal cost. b) typically earn a negative economic profit. c) sell a product that is completely unique. d) behave similarly to a monopoly. 2.2 In the long run, monopolistically competitive firms: a) tend to earn zero economic profit due to entry of new firms. b) tend to earn positive profit due to barriers to entry. c) tend to earn negative profit because consumers prefer different products as incomes rise. d) tend to produce at minimum ATC. 2.3 Monopolistically competitive markets are: a) Less efficient than pure monopoly and pure competition. b) Less efficient than pure monopoly and more efficient than pure competition. c) More efficient than pure monopoly and less efficient than pure competition. d) More efficient than pure monopoly and pure competition. 2.4 Which of the following is NOT a characteristic of a monopolistically competitive market? a) Many firms b) Firms are price-setters c) Firms engage in advertising d) Tough barriers to entry

2.1 In the short run, monopolistically competitive firms: a) charge a price equal to marginal cost. b) typically earn a negative economic profit. c) sell a product that is completely unique. d) behave similarly to a monopoly. 2.2 In the long run, monopolistically competitive firms: a) tend to earn zero economic profit due to entry of new firms. b) tend to earn positive profit due to barriers to entry. c) tend to earn negative profit because consumers prefer different products as incomes rise. d) tend to produce at minimum ATC. 2.3 Monopolistically competitive markets are: a) Less efficient than pure monopoly and pure competition. b) Less efficient than pure monopoly and more efficient than pure competition. c) More efficient than pure monopoly and less efficient than pure competition. d) More efficient than pure monopoly and pure competition. 2.4 Which of the following is NOT a characteristic of a monopolistically competitive market? a) Many firms b) Firms are price-setters c) Firms engage in advertising d) Tough barriers to entry

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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