3 Of 16a. A monopolistic competitor, much like a firm in perfectb. Advertising can play a role as an indirect signal ofcompetition, sells its product at a pointproduct quality to customers.where the price is equal to the marginal cost.truefalsetrueO falsec. Monopolistically competitive industries are more likelyd. In the long run, monopolistic competitors make ato make use of advertising to create products that catchsimilar amount of profit to monopolists, since, in bothon in mainstream popularity than industries in perfectcases, the firm's demand curves are downward sloping,competition.and at the profit maximizing point, the marginal cost istruefalseequal to the marginal revenue.O trueO falsee. In the short term, a monopolistic competitor will makea profit if the demand curve is above the average totalcost curve at some point.truefalse

A.) False In monopolistic competitive market a firm cannot sell its product when the price is equal…

a. A monopolistic competitor, much like a firm in perfect b. Advertising can play a role as an indirect signal of competition, sells its product at a point product quality to customers. where the price is equal to the marginal cost. O false true O true false

a. A monopolistic competitor, much like a firm in perfect b. Advertising can play a role as an indirect signal of competition, sells its product at a point product quality to customers. where the price is equal to the marginal cost. O false true O true false

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

3 Of 16
a. A monopolistic competitor, much like a firm in perfect
b. Advertising can play a role as an indirect signal of
competition, sells its product at a point
product quality to customers.
where the price is equal to the marginal cost.
true
false
true
O false
c. Monopolistically competitive industries are more likely
d. In the long run, monopolistic competitors make a
to make use of advertising to create products that catch
similar amount of profit to monopolists, since, in both
on in mainstream popularity than industries in perfect
cases, the firm's demand curves are downward sloping,
competition.
and at the profit maximizing point, the marginal cost is
true
false
equal to the marginal revenue.
O true
O false
e. In the short term, a monopolistic competitor will make
a profit if the demand curve is above the average total
cost curve at some point.
true
false

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Exercise A.2. Point out the basic characteristics that define monopolistic competition and indicate the inefficiencies of this market structure.
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An important difference between the situation faced by a profit-maximizing monopolistically competitive firm in the short run and the situation faced by that same firm in the long run is that in the short run, a. there are many firms in the market, but in the long run, there are only a few firms in the market. b. price may exceed marginal cost, but in the long run, price equals marginal cost. c. price may exceed marginal revenue, but in the long run, price equals marginal revenue. d. price may exceed average total cost, but in the long run, price equals average total cost.
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Only typed answer, don't use chatgpt 2. How does advertising impact monopolistically competitive firms? A. It causes a firms perceived demand curve to become more inelastic. B. It either causes a firms perceived demand curve to become more elastic, or advertising causes demand for the firms product to increase. C. Advertising always causes monopolistically competitive firms to experience lover average costs.
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