The demand curves of firms in monopolistically competitive markets are re compar

Question

The demand curves of firms in monopolistically competitive markets are re compared a. the existence of very close substitutes. the large size of the typical firm in the market. marginal revenue exceeding price the complexity of production. c. d. Jane plans to open her own restaurant and wants to create a strong demand for her product as well as make it less price elastic. All of the following are methods of product differentiation that would help her accomplish her goals except: a. setting the price of her meals well below the prices charged by her rivals. b. using tasteful furnishings and music to create a pleasant atmosphere c. hiring the best chefs so she can offer the finest quality cuisine. d. using different forms of advertising to inform and attract potential customers. Chapter 13 Assignments 20 1

Explanation / Answer

Answer 1:

Option C. Marginal revenue exceeding price makes the demand curve relatively elastic.

Answer 2:

Option A. All the other options can be used for product differetiation but not the first one.

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