Which of the following statements is true of a monopolistically competitive firm?
a. It produces more than a perfectly competitive firm.
b. Its profits are protected by significant barriers to entry.
c. It charges lower prices than a perfectly competitive firm.
d. It earns positive economic profits in the long run.
e. It faces a downward sloping demand curve.
.
Homework Answers
1. e. It faces a downward sloping demand curve.
2. When the firm chooses a level of production F, buyers will pay a price E
When the firm chooses a level of production F, buyers will pay a price D
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