Question : 51) In the long run, firms in monopolistic competition produce : 1238844

51) 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.

52) 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

53) 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.

54) 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.

55) 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.

56) Which of the following statements about a firm in long-run equilibrium is true?

A) P > MC for a firm in monopolistic competition, and P = ATC for a firm in perfect competition

B) MR > P for a firm in monopolistic competition, and P = ATC for a firm in perfect competition

C) P = MC for firms in both monopolistic competition and perfect competition

D) P = MC for a firm in perfect competition, and P < ATC for a firm in monopolistic competition E) Both answers A and B are correct. 57) A firm in monopolistic competition is A) efficient because in the long run it makes zero economic profit. B) efficient because it produces at the minimum average total cost. C) inefficient because price exceeds marginal cost. D) efficient because of the ease of entry. E) efficient because it produces where MR = MC.   58) A monopolistically competitive firm is inefficient because the firm A) makes positive economic profit in the long run. B) is producing at an output where marginal cost equals price. C) is not maximizing its profits. D) produces a product identical to that of its competitors. E) produces at an output level where average total cost is not at its minimum.   59) Monopolistic competition is judged to be economically inefficient because A) the price is greater than marginal cost. B) firms make zero economic profit in the long run. C) marginal revenue equals marginal cost. D) firms have deficient capacity in the long run. E) firms make an economic profit in the long run.   60) One of the major benefits to society of monopolistic competition is A) high prices. B) restricted output. C) product differentiation. D) the excess capacity. E) the markup.