Firms in monopolistic competition can achieve product differentiation by
A) expanding plant size.
B) exploiting economies of scale in production.
C) advertising special characteristics.
D) setting the price equal to average revenue.
Question 2
Robinson spends all his income on mangos and bananas. Mangos cost 3 per pound and bananas cost 1 per pound. The marginal utility is 24 for the last pound of mangos purchased and 10 for the last pound of bananas.
To maximize his utility, Robinson should buy A) more mangos and fewer bananas.
B) more bananas and fewer mangos.
C) the present combination of goods.
D) only mangos.
