This graph shows the cost and revenue curves faced by a monopoly. 
According to the graph, if the perfectly competitive outcome and monopoly outcome are compared, we can see that the:
A. monopoly creates deadweight loss.
B. monopolist would charge P3 and the perfectly competitive firm would charge P1.
C. perfectly competitive firm would lose money in this industry.
D. perfectly competitive firm would produce Q1 units.
Answer: A
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A firm in monopolistic competition has some degree of price-setting power because
A) in the long run it earns a normal profit. B) it can never earn less than normal profit. C) the price it charges is never more than its marginal cost. D) if it raises its price, the quantity it can sell will not decrease to zero.
The development of the Internet and e-mail to often replace regular mail services is an example of:
A. specialization. B. creative destruction. C. derived demand. D. roundabout production.
If demand for a good is price elastic, it must also be income elastic
a. True b. False Indicate whether the statement is true or false
Monopolistically competitive firms offer consumers more variety than perfectly competitive firms.
Answer the following statement true (T) or false (F)