Question : 41) In the long run, a firm in monopolistic competition : 1238843

41) In the long run, a firm in monopolistic competition will produce

A) where average total cost is minimized.

B) where price equals average total cost, but average total cost is not at its minimum.

C) zero output.

D) any possible amount of output.

E) where price equals marginal cost.

42) Which of the following is NOT a characteristic of long-run equilibrium in monopolistic competition?

A) The firm makes zero economic profit.

B) Price is equal to average total cost.

C) Production occurs at minimum average total cost.

D) Marginal revenue is equal to marginal cost.

E) Price exceeds marginal revenue.

43) In the long run, a firm in monopolistic competition will

A) produce so that its price equals marginal cost.

B) operate at the minimum of the long-run average cost.

C) overutilize its insufficient capacity.

D) produce so that its price equals average total cost.

E) be dependent on the other firms in the industry.

44) 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

45) 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.

46) 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

47) 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

48) A monopolistically competitive firm ________ have excess capacity because its ________.

A) does; demand curve is downward sloping

B) does not; demand curve is downward sloping

C) does; average total cost curve is U-shaped

D) does not; average total cost curve is U-shaped

E) does; marginal revenue curve lies below its demand curve

49) The figure above shows Firm X. The ________ firm charges a markup of ________.

A) monopolistically competitive; $10 per unit because price exceeds marginal cost

B) monopolistically competitive; $20 per unit because prices exceeds average total cost

C) perfectly competitive; $10 per unit because price equals average total cost

D) perfectly competitive; $20 per unit because price exceeds average total cost

E) monopolistically competitive; $10 per unit because the demand curve lies above the marginal revenue curve

50) 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.