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practice problem set for chapter 11

practice problem set for chapter 11 - econ 2100 practice...

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econ 2100 practice problem set for chapter 11 Name: __________________________ Date: _____________ 1. In monopolistic competition: A) firms advertise to increase demand for their product. B) entry of new firms shifts the demand curve for existing firms to the right. C) when some firms exit, the demand curve for the firms that remain in the industry shifts to the left. D) all of the above are true. Use the following to answer question 2: Figure: Comparing Long-Run Equilibriums 2. (Figure: Comparing Long-Run Equilibriums) In the accompanying figure, which of the following statements is true ? Page 1
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3. If monopolistically competitive firms are earning positive economic profits in the short run, then in the long run: 4. In monopolistic competition, each firm: 5. Long-run equilibrium in perfect competition and in monopolistic competition are similar because, in both, firms: A) produce at the minimum point of the average total cost curve. B) set price equal to marginal cost. C) make zero economic profits. D) have excess capacity.
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