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Microeconomics, 5e (Hubbard/O'Brien)Chapter 13 Monopolistic Competition: The Competitive Model in a More Realistic Setting13.1 Demand and Marginal Revenue for a Firm in a Monopolistically Competitive Market4) Which of the following characteristics is notcommon to monopolistic competition and perfectcompetition?A) Firms act to maximize profit. B) Entry barriers into the industry are low.C) The market demand curve is downward -sloping.D) Firms take market prices as given.Answer: D7) The key characteristics of a monopolistically competitive market structure includeB9) In monopolistic competition there is/areA10) Which of the following is true for a firm with a downward-sloping demand curve for its product?C11) If a firm faces a downward-sloping demand curveA) the demand for its product must be inelastic.B) it can control both price and quantity sold.C) it must reduce its price to sell more units.D) it will always make a profit.Answer: C
12) A monopolistically competitive firm faces a downward-sloping demand curve becauseC13) A monopolistically competitive firm willC16) If the demand curve for a firm is downward-sloping, its marginal revenue curveB