Author Question: A firm in monopolistic competition has some degree of price-setting power because A) in the long ... (Read 92 times)

dalyningkenk · **on:** Jun 29, 2018

A firm in monopolistic competition has some degree of price-setting power because

A) in the long run it earns a normal profit.
B) it can never earn less than normal profit.
C) the price it charges is never more than its marginal cost.
D) if it raises its price, the quantity it can sell will not decrease to zero.

Question 2

When two firms collude to maximize profit the total quantity produced by both firms taken together is determined at the quantity where ________.

A) excess capacity is minimized
B) industry marginal cost equals industry marginal revenue
C) the price equals the industry's marginal cost
D) excess capacity is as large as possible zero