1.If firms in a monopolistically competitive industry are earningpositive profits,A) firms will certainly likely be subject to regulation.B) barriers to enattempt will certainly be strengthened.C) some firms must leave the market.D) brand-new firms will enter the sector.2.Panel c in the collection of numbers presented is continual via a firm in amonopolistically competitive industry that isA) earning profit and also is in both short-run and also long-runequilibrium.B) earning financial profit and is in short-run equilibrium, but notlong-run equilibrium.C) earning profit and also is in long-run equilibrium, yet not short-runequilibrium.D) earning an unfavorable profit and is not in equilibrium.3.When a profit-maximizing firm in a monopolistically competitiveindustry is producing the long-run equilibrium amount,A) its marginal revenue will certainly exceed its marginal cost.B) its average revenue will equal its marginal cost.C) it will certainly be earning positive financial profits.D) its demand curve will be tangent to its average-total-costcurve.4.Monopolistic competition differs from perfect competition becausein monopolistically competitive marketsA) each of the sellers provides a somewhat different product.B) strategic interactions in between firms is vitally important.C) tright here are obstacles to entry.D) all firms have the right to ultimately earn financial profits.5.The totally free entry and departure of firms in a monopolistically competitivesector promises thatA) financial losses deserve to persist into the long run, but not economicearnings.B) both economic revenues and economic losses deserve to persist right into thelong run.C) financial profits deserve to persist into the long run, however not economiclosses.D) both economic revenues and also financial losses disappear in the longrun.6.Panel (a) mirrors a profit-maximizing monopolistically competitivefirm that isA) All answers are correctB) earning a zero profit.C) charging a price that is equal to average total cost.D) in long-run equilibrium.7.Since a firm in a monopolistically competitive industry faces aA) perfectly elastic demand also curve, it will certainly constantly run withexcess capacity.B) downward-sloping demand curve, it will certainly constantly operate atefficient scale.C) perfectly inelastic demand curve, it will always run ateffective scale.D) downward-sloping demand curve, it will certainly always operate withexcess capacity.8.In a monopolistically competitive sector,A) firms deserve to enter or departure the market without restriction.B) each firm takes the price of its product as given.C) each firm produces a product that is fundamentally similar tothe commodities of other firms in the sector.D) tright here are just a few sellers.9.The truth that tright here is a great deal of advertising of men’s shavingassets shows thatA) it prices firms extremely bit to create those products.B) the sector for those assets is perfectly competitive.C) those products are extremely differentiated.D) All answers are correct10.A profit-maximizing firm in a monopolistically competitive marketdiffers from a firm in a perfectly competitive sector because thefirm in the monopolistically competitive marketA) has actually no obstacles to entry.B) encounters a downward-sloping demand curve for its product.C) encounters a horizontal demand also curve at the industry clearingprice.D) is characterized by market share maximization.


You are watching: In the long run, economic theory predicts that a monopolistically competitive firm will:

*

If a firm in a perfectly competitive market is presently creating the output wright here price = marginal expense = average complete price, the firm is:

A) earning a zero economic profit.B) experiencing an economic loss.C) earning a positive financial profit.D) all of the above


*



See more: 5 World Children’S Games In The Whole Wide World, Whole Wide World, Fun Learning Games For Kids 5

The theory of monopolistic competition predicts that in long-run equilibrium, a monopolistically competitive firm will: