Author Question: Freedom of entry and exit in monopolistic competition A) means that firms' price and average ... (Read 106 times)

leilurhhh · **on:** Jun 29, 2018

Freedom of entry and exit in monopolistic competition

A) means that firms' price and average total cost of producing are always equal.
B) never allows firms to earn economic profits.
C) leads to falling prices when new firms enter the market.
D) forces firms to abandon product differentiation but only in the long run.

Question 2

When comparing perfect competition to a single-price monopoly with the same costs

A) both market types use resources efficiently.
B) there is a deadweight loss associated with a monopoly.
C) the sum of producer and consumer surplus is maximized under a monopoly.
D) the sum of producer and consumer surplus is minimized under perfect competition.