If demand curve D2 represents a monopolistic competitor and demand curve D1 represents a perfect competitor, then
A. the perfect competitor has a more elastic demand curve than the monopolistic competitor.
B. the monopolistic competitor has a more elastic demand curve than the perfect competitor.
C. the perfect competitor and the monopolistic competitor have identical elasticity in their demand curves.
D. None of these choices are true.
A. the perfect competitor has a more elastic demand curve than the monopolistic competitor.
You might also like to view...
If the demand curve is very inelastic and the supply curve is very elastic in a market, then the sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers
a. True b. False Indicate whether the statement is true or false
Which of the following results if the U.S. removes an import quota on computer components?
a. U.S. exports and U.S. imports both increase b. U.S. exports increase but U.S. imports are unchanged c. U.S. imports increase but U.S. exports are unchanged d. None of the above are correct
Just like a monopolist, a monopolistically competitive firm:
A. sets the price according to marginal revenue and marginal cost; the demand curve doesn't matter. B. cannot sell additional units of output without lowering the price. C. is a price taker. D. faces a perfectly elastic demand curve.
Will a monopolist produce at a quantity that is higher than the long-run competitive equilibrium output level?
A. No, profit maximization for a monopoly always occur at a lower output level than in a competitive market. B. Yes, the monopoly always produces at an output level larger than in a competitive market. C. Yes, but only if it is a monopoly because it holds a patent. D. There is no theory in microeconomics that states that a monopolist produces larger or smaller output than in a perfectly competitive firm in the long-run.