Question

2. For a Monopolistic Competitive firm In the long run: The rate of return will [tend toward normal or opportunity cost, Tend below normal or opportunity cost, Tend Toward Increasing profit above opportunity cost]. Economic profits will tend toward [Significant Profits, Losses, Zero]. This theoretically results in [less efficiency, the same efficiency, greater efficiency] than a Perfect competitor and [less efficiency, the same efficiency, greater efficiency] that a monopoly.

Because “differentness” has value for consumers, monopolistically competitive firms regard their brand names as  [tangible, Intangible, Valuable private (intellectual) property, Worthless private (intellectual Property)]

2. Monopolistic Competition includes the following 3 characteristics

Group of answer choices:

a. The firm has no control over the price it charges

b. The more successful the firm is at differentiation, the more control it has over price

c. The firm has significant control over the price it charges

d. Unlike a perfect competitor, it faces a flat demand curve

e. like a perfect competitor, it faces a downward sloping demand curve

f. Unlike a perfect competitor, it faces a downward sloping demand curve

g. No answer text provided.

h. No answer text provided.

i. The firm has some control over the price it charges

Answer 1

1)

For a Monopolistic Competitive firm In the long run:

The rate of return will [tend toward normal ].

Economic profits will tend toward [ Zero].

This theoretically results in [less efficiency,] than a Perfect competitor and [ greater efficiency] that a monopoly.

Because “differentness” has value for consumers, monopolistically competitive firms regard their brand names as  [ Valuable private (intellectual) property)]

Under the monopolistically competitive market, over the long run firms get only normal profit but firms do not operate at the minimum point of AC. Firm operates at the falling part of AC, thus is inefficient.

2)

Answer: b ,f and i.

there are differentiations in the products that are provided by the monopolistic firms. Further, these firms have some control over the price they charge. it happens owing to the product differentiation. Demand curve is downward sloping that suggests that more demand happens when price level declines.