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Economic analysis of a monopolistically competitive industry is more complicated than that of pure competition because:
Marginal revenue equals marginal cost and price equals average total cost.
Monopolistically competitive markets only.
In the price range where marginal revenue is positive.
Close down because, by producing, your losses will exceed your total variable costs.
Perfectly elastic; down sloping
Of product differentiation and consequent advertising activities.
Advertising, product promotion, and changes in the real or perceived characteristics of a product.
Supply
3. The marginal cost curve for a firm is representative of which curve for an industry?
Marginal revenue equals marginal cost and price equals average total cost.
Monopolistically competitive markets only.
In the price range where marginal revenue is positive.
Close down because, by producing, your losses will exceed your total variable costs.
Perfectly elastic; down sloping
Of product differentiation and consequent advertising activities.
Advertising, product promotion, and changes in the real or perceived characteristics of a product.
Supply
24. The demand curve in a perfectly competitive firm is ________; while the demand curve for a monopoly is ________.
Marginal revenue equals marginal cost and price equals average total cost.
Monopolistically competitive markets only.
In the price range where marginal revenue is positive.
Close down because, by producing, your losses will exceed your total variable costs.
Perfectly elastic; down sloping
Of product differentiation and consequent advertising activities.
Advertising, product promotion, and changes in the real or perceived characteristics of a product.
Supply
Non-price competition refers to:
Marginal revenue equals marginal cost and price equals average total cost.
Monopolistically competitive markets only.
In the price range where marginal revenue is positive.
Close down because, by producing, your losses will exceed your total variable costs.
Perfectly elastic; down sloping
Of product differentiation and consequent advertising activities.
Advertising, product promotion, and changes in the real or perceived characteristics of a product.
Supply
The pure monopolist's demand curve is relatively elastic:
Marginal revenue equals marginal cost and price equals average total cost.
Monopolistically competitive markets only.
In the price range where marginal revenue is positive.
Close down because, by producing, your losses will exceed your total variable costs.
Perfectly elastic; down sloping
Of product differentiation and consequent advertising activities.
Advertising, product promotion, and changes in the real or perceived characteristics of a product.
Supply
When a monopolistically competitive firm is in long-run equilibrium:
Marginal revenue equals marginal cost and price equals average total cost.
Monopolistically competitive markets only.
In the price range where marginal revenue is positive.
Close down because, by producing, your losses will exceed your total variable costs.
Perfectly elastic; down sloping
Of product differentiation and consequent advertising activities.
Advertising, product promotion, and changes in the real or perceived characteristics of a product.
Supply
20. Suppose you find that the price of your product is less than minimum AVC. You should:
Marginal revenue equals marginal cost and price equals average total cost.
Monopolistically competitive markets only.
In the price range where marginal revenue is positive.
Close down because, by producing, your losses will exceed your total variable costs.
Perfectly elastic; down sloping
Of product differentiation and consequent advertising activities.
Advertising, product promotion, and changes in the real or perceived characteristics of a product.
Supply
Product differentiation is a key characteristic of:
Marginal revenue equals marginal cost and price equals average total cost.
Monopolistically competitive markets only.
In the price range where marginal revenue is positive.
Close down because, by producing, your losses will exceed your total variable costs.
Perfectly elastic; down sloping
Of product differentiation and consequent advertising activities.
Advertising, product promotion, and changes in the real or perceived characteristics of a product.
Supply
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