Monopolistic competition is like monopoly in the sense that which of the following are the same?
a. there are many buyers and sellers
b. they both face a downward sloping demand curve
c. they both make long-run profits
d. their products are homogeneous
b
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Interlace, Inc produces and a unique soda. The company cannot price discriminate. The figure above shows Interlace's demand curve, marginal revenue curve, and marginal cost curve. Interlace, Inc is definitely
A) a perfectly competitive firm. B) not a perfectly competitive firm. C) a natural monopoly. D) None of the above answers is correct.
How does empirical analysis relate to positive statements?
a. Positive statements are testable; empirical analysis is contestable. b. Both empirical analysis and positive statements collect data. c. Positive statements prove the validity of empirical analysis. d. Empirical analysis tests positive statements by collecting data.
Answer the following statement(s) true (T) or false (F)
1. The demand curve for a monopolistic firm is the same as the demand curve for its market. 2. A monopolist’s marginal revenue always less than the price. 3. A monopolist will intentionally operate on the inelastic portion of its demand curve. 4. If marginal costs exceed marginal revenues, profits drop. 5. Multiplying average total cost by the output level gives the total cost.
Graphically, as a consumer buys more of a good, the marginal utility line will
A. Increase steadily and then decline. B. Follow the same shape as the total utility line. C. Continuously decline if diminishing returns are present. D. Increase as more goods are consumed.