[Solved] Why Is It Impossible for a Monopolistically Competitive Firm to Achieve

Which one of the following statements is true about a monopolistically competitive firm in long-run equilibrium? A)Its output is larger than it would be under conditions of perfect competition. B)Its average cost is lower that it would be under conditions of perfect competition. C)It is producing at economic capacity just as it would be under conditions of perfect competition. D)Its price is equal to its marginal cost just as it would be under conditions of perfect competition. E)None of the choices are correct.

What is true about both perfectly competitive and monopolistically competitive firms in long-run equilibrium? A)They produce at minimum average cost. B)They earn economic profits. C)They achieve allocative efficiency. D)They achieve productive efficiency. E)They equate marginal cost and marginal revenue.

Which of the following statements concerning a monopolistically competitive industry is correct? A)If there are short-run losses,firms will exit from the industry and the demand of the remaining firms will decrease. B)If there are short-run losses,firms will exit from the industry and the demand of the remaining firms will increase. C)If there are short-run profits,firms will exit from the industry and the demand of the remaining firms will increase. D)If there are short-run profits,firms will enter the industry and the demand of the remaining firms will increase.

How are a typical monopolistically competitive firm and a typical perfectly competitive firm alike? A)Both face perfectly elastic demand. B)Both experience zero economic profits in the long run. C)Both achieve allocative efficiency only. D)Both achieve productive efficiency only. E)Both achieve allocative and productive efficiency.

Which of the following statements is correct concerning a typical firm operating under conditions of monopolistic competition in the long run? A)Excess capacity is lowered as demand becomes less elastic. B)It operates on the rising portion of its average cost curve because of excess capacity. C)The greater the product differentiation the lower will be the amount of excess capacity. D)None of the choices are correct.

What does excess capacity mean? A)The situation where a firm's output is below economic capacity. B)The situation where a firm's output is above economic capacity. C)The situation where a firm is producing an output below equilibrium. D)The situation where a firm is producing an output above equilibrium.

What is the root cause of excess capacity in a monopolistically competitive industry? A)Inefficient producers. B)Product differentiation. C)Free entry. D)Rising marginal cost.

All of the following,except one,are benefits of product differentiation.Which is the exception? A)There is a wide variety of products for consumers to choice from. B)There are a large number of sellers from which consumers can choose. C)Goods are produced at the minimum average cost. D)Consumers benefit in terms of the locations and hours of operation of sellers.

Below are data for a monopolistically competitive firm. -Refer to the information above to answer this question.What output will this profit-maximizing firm produce? A)3. B)4. C)5. D)6. E)7.

Below are data for a monopolistically competitive firm. -Refer to the information above to answer this question.What is true if the firm is producing at the profit-maximizing output? A)It is producing at economic capacity B)It is achieving allocative efficiency. C)It is achieving both economic and allocative efficiency D)It is experiencing excess capacity