A monopolistically competitive industry that earns

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Microeconomics
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Chapter 11 / Exercise 2
Microeconomics
Arnold
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22. A monopolistically competitive industry that earns economic profits in the short run willA) experience the exit of old firms out of the industry in the long run.B) experience a rise in demand in the long run.C) continue to earn economic profits in the long run.D) experience the entry of new rival firms into the industry in the long run.
23. Assuming that the total market size remains constant, a monopolistically competitive firm earning profits inthe short run will find the demand for its product decreasing in the long run because
Figure 12-524.Refer to Figure 12-5. What is the profit maximizing output level?
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Microeconomics
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Chapter 11 / Exercise 2
Microeconomics
Arnold
Expert Verified
25.Refer to Figure 12-5. What is the output price?
26.Refer to Figure 12-5. What is the area that represents the firmʹs profit?A)P4edP2B)Profit =C)P4eaP1D)P3baP2
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27.Refer to Figure 12-5. Economies of scale are exhausted at which output level?
28.Refer to Figure 12-5.If the diagram represents a typical firm in the market, what is likely to happen in the longrun?
29.Refer to Figure 12-5.If the diagram represents a typical firm in the market, what is likely to happen to itsaverage cost of production in the long run?
30. If a typical monopolistically competitive firm is making short run losses, thenA) as some firms leave, the demand for the products of the remaining firms will become more elastic.B) the industry will eventually cease to exist.C) as some firms leave, the remaining firms will experience an increase in the demand for their products.D) other more competitive firms will enter the market.

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