Chapter 16 Homework Answer Keys

Chapter 16 Homework - 4 a Both a firm in monopolistic competition and a monopoly firm face a downward-sloping demand curve b Both a firm in

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Chapter 16 Homework Answer Keys 3. a. A firm in monopolistic competition sells a differentiated product from its competitors. b. A firm in monopolistic competition has marginal revenue less than price. c. Neither a firm in monopolistic competition nor in perfect competition earns economic profit in the long run. d. A firm in perfect competition produces at minimum average total cost in the long run. e. Both a firm in monopolistic competition and a firm in perfect competition equate marginal revenue and marginal cost. f. A firm in monopolistic competition charges a price above marginal cost.
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Unformatted text preview: 4. a. Both a firm in monopolistic competition and a monopoly firm face a downward-sloping demand curve. b. Both a firm in monopolistic competition and a monopoly firm have marginal revenue that is less than price. c. A firm in monopolistic competition faces the entry of new firms selling similar products. d. A monopoly firm earns economic profit in the long run. e. Both a firm in monopolistic competition and a monopoly firm equate marginal revenue and marginal cost. f. Neither a firm in monopolistic competition nor a monopoly firm produce the socially efficient quantity of output....
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This note was uploaded on 04/26/2011 for the course ECON 201 taught by Professor Joyce during the Spring '07 term at Drexel.

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