A. free entry and exit
B. long run economic profits
C. many sellers
D. differentiated products
Related Mcqs:
- Which of the following is true regarding the production and pricing decisions of monopolistically competitive firms? Monopolistically competitive firms choose the quantity at which marginal cost equals ?
A. marginal revenue and then use the demand curve to determine the price consistent with this quantity
B. average total cost and then use the supply curve to determine the price consistent with this quantity
C. marginal revenue and then use the supply curve to determine the price consistent with this quantity
D. average total cost and then use the demand curve to determine the price consistent with this quantity - Which of the following is true with regard to monopolistically competitive firms scale of production and pricing decisions Monopolistically competitive firms produce ?
A. at the efficient scale and charge a price equal to marginal cost
B. at the efficient scale and charge a price above marginal cost
C. With excess capacity and charge a price above marginal cost
D. With excess capacity and charge a price equal to marginal cost - Which of the following products is least likely to be sold in a monopolistically competitive market ?
A. breakfast
B. cotton
C. video games
D. beer - When firms enter a monopolistically competitive market and the business-stealing externality is larger than the product-variety externality then ?
A. there are too many firms in the market and market efficiency could be increased if firms exited the market
B. the number of firms in the market is optimal and the market is efficient
C. There are too few firms in the market and market efficiency could be be increased with additional entry
D. The only way to improve efficiency in this market is for the government to regulate it like a natural monopoly. - In the short run, if the price is above average total cost in a monopolistically competitive market, the firm makes ?
A. losses and firms exit the market
B. profits and firms exit the market
C. losses and firms enter the market
D. profits and firms enter the market - A monopolistically competitive firm that is incurring a loss will produce as long as the price that the firm charges is sufficient to cover ?
A. marginal costs
B. fixed costs
C. variable costs
D. advertising costs - A firm in a monopolistically competitive industry ?
A. sells a fixed amount of output regardless of price.
B. must raise price to sell more output
C. can sell an infinite amount of output at the market-determined price
D. must lower price to sell more output. - Which of the following is not a characteristic of a competitive market ?
A. All of these answers are characteristic of a competitive market
B. The are many buyers and sellers in the market
C. The goods offered for sale are largely the same.
D. Firms generate small but positive economic profits in the long run
E. Firms can freely enter or exit the market - Which of the following market would most closely satisfy the requirements for a competitive market ?
A. electricity
B. cable television
C. cola
D. milk
E. All of these answers represent competitive markets - Compared to a perfectly competitive market a monopoly market will usually generate ?
A. higher prices and lower output
B. higher prices and higher output
C. lower prices and lower output
D. lower prices and higher output
