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Author Question: A monopolistically competitive firm and a perfectly competitive firm are alike because both types of ... (Read 147 times)

RODY.ELKHALIL

  • Hero Member
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on: Jun 29, 2018
A monopolistically competitive firm and a perfectly competitive firm are alike because both types of firms
 
  I. face downward sloping demand curves.
  II. have marginal revenue curves that lie beneath their demand curves.
  III. can make only zero economic profit in the long run.
  A) I and II
  B) I and III
  C) III only
  D) I only

Question 2

Which of the following best explains why monopolistically competitive firms face a downward sloping demand curve while perfectly competitive firms do not?
 
  A) Monopolistically competitive firms sell a differentiated good.
  B) Monopolistically competitive industries have only a few firms.
  C) Monopolistically competitive firms have barriers to entry.
  D) Only industries with free entry and exit have firms that face horizontal demand curves.


14vl19

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Reply #1 on: Jun 29, 2018
Answer to Question 1

C

Answer to Question 2

A


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