1. Advertising is an economically productive activity and NOT a waste of resourc

Question

1. Advertising is an economically productive activity and NOT a waste of resources because: advertisements increase sales. advertisements can convey information about the product. advertisements can signal that firms are desperate for customers. advertising can decrease the costs of production. 2. Because a monopolistically competitive firm faces a downward-sloping demand curve for its product, its price will be: equal to marginal revenue. less than marginal revenue. greater than marginal revenue. equal to total revenue. 3. Figure: Possible Long-Run Outcome __(Figure: Possible Long-Run Outcome) Examine the figure Possible Long -Run Outcome. In the figure, which price and quantity refer to a potential long -run profit maximizing outcome for a firm producing in a monopolistically competitive market? P1 and Q3 P1 and Q1 P2 and Q2 P1 and Q4 4. For dry cleaners and other service providers, the type of product differentiation offered is likely to be differentiation by: location. quality. style. type. 5. Figure: Monopolistic Competition __(Figure: Monopolistic Competition) Examine the figure Monopolistic Competition. The monopolistic competitor in the figure is producing at the output level that maximizes profits (minimizes losses). The shaded rectangle depicts the level of: profit. loss. fixed cost. variable cost.

Explanation / Answer

In this curve shaded portion is losses of the monopolist because the average cost curve higher than average revenue curve.

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