A Monopolistically Competitive Firm Maximizes Profits in the Short Run
A monopolistically competitive firm maximizes profits in the short run
A)by equating MC with price.
B)by equating MC with MR.
C)when P = AVC.
D)when P = ATC.
E)by maximizing total revenue.
Suppose that a monopolistically competitive firm decides to raise its price.The theory of monopolistic competition predicts that
A)this firm would lose some,but not all of its customers.
B)this firm would increase its profits.
C)this firm would lose all of its customers.
D)increasing the price has no effect on profits.
E)a large loss of customers as the demand facing the firm is quite inelastic.
The main difference between perfect competition and monopolistic competition is
A)there are more firms in perfect competition.
B)perfect competition has freedom of entry and exit.
C)monopolistic competition has product differentiation.
D)firms earn profits in the long run in monopolistic competition.
E)monopolistic competition has lower costs.
Of the following,which is the best example of a monopolistically competitive firm?
D)a PEI potato farmer
E)a local hair salon