Question : 41) Which of the following TRUE about a firm in : 1226251

41) Which of the following is TRUE about a firm in monopolistic competition in the long run?

A) P = MC

B) P = MR

C) ATC = MC

D) P = ATC

E) MC = ATC

42) In the long-run, a firm in monopolistic competition produces at an output level where

A) P > ATC and MR = MC.

B) P > ATC and MR > MC.

C) P = ATC and MR = MC.

D) P = ATC and MR > MC.

E) P = ATC and MC = ATC.

43) Which of the following is true of monopolistic competition in long-run equilibrium?

A) P = MR and P = MC

B) P > ATC and MR = MC

C) P = ATC and MR = MC

D) P = ATC and P = MC

E) P > ATC and P > MR

44) In monopolistic competition in the long run, firms ________.

A) make zero economic profit and require more capacity

B) incur an economic loss and require more capacity

C) make an economic profit and have excess capacity

D) make zero economic profit and have excess capacity

E) make an economic profit and require more capacity

45) Excess capacity is the

A) difference between a perfectly competitive firm’s and a monopolistically competitive firm’s output.

B) difference between a perfectly competitive firm’s and a monopoly’s output.

C) output at the maximum point of the ATC curve.

D) difference between the price charged by a monopoly and a monopolistically competitive firm with the same costs.

E) None of the above answers is correct.

46) In the long run, firms in monopolistic competition produce at a level that is ________ the efficient scale of output.

A) less than

B) equal to

C) more than

D) not comparable to

E) All of the above are possible depending on market conditions.

47) For a firm in monopolistic competition, the efficient scale is the amount of output at which ________ is a minimum.

A) fixed cost

B) average total cost

C) average variable cost

D) average fixed cost

E) marginal cost

48) Excess capacity exists when a firm produces

A) more than the profit-maximizing level of output.

B) less than the quantity that minimizes average total cost.

C) less than the quantity that minimizes marginal cost.

D) more than the quantity that minimizes marginal cost.

E) None of the above answers is correct.

49) If a firm is maximizing its profit and producing less than the output at which its average total cost is minimized, then that firm

A) must be suffering an economic loss.

B) must be earning an economic profit.

C) has excess capacity.

D) is producing at its capacity output.

E) must be earning a normal profit.

50) Which of the following is correct?

A) A firm in monopolistic competition does not have excess capacity in the long run.

B) A firm in perfect competition operates at maximum average total cost in the long run.

C) In the long run, a firm in monopolistic competition maximizes its profit at a point where price is equal to average total cost but the average total cost is not minimized.

D) In the long run, a firm in monopolistic competition makes zero economic profit and its price is equal to the minimum average total cost.

E) In the long run, a firm in monopolistic competition can make an economic profit because of product differentiation.