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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….
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 costC. With excess capacity and charge a price…
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…
Which of the following is true regarding the similarities and differences in monopolistic competition and monopoly ? A. the monopolist faces a downward-slog demand curve while the monopolistic competitor faces an elastic demand curve B. the monopolist charges a price above marginal cost while the monopolistic competitor charges a price equal to marginal costC. The…
Which of the following is not a characteristic of a monopolistically competitive market ? A. free entry and exitB. long run economic profits C. many sellers D. differentiated products