The best description of industries below is that: a monopolistically competitive
ID: 1167110 • Letter: T
Question
The best description of industries below is that:
a monopolistically competitive industry is more competitive than any other industry form.
monopolies are more competitive than monopolistically competitive firms.
monopolistically competitive firms are located between monopoly and perfect competition.
all firms can make a long-run economic profit, but only perfect competitors can make a shortrun profit.
all firms engage in short-run loss minimization by selecting the point where marginal revenue = price.
Excess capacity best describes the fact that:
monopolistically competitive firms produce less than the cost-minimizing level of output.
monopolistically competitive firms produce more than the cost-minimizing level of output.
monopolistically competitive firms produce exactly the cost-minimizing level of output, but the monopolistically competitive industry produces more than that amount.
monopolistically competitive firms could produce less if they wanted to, so they produce over the optimal capacity.
perfectly competitive firms produce less than the cost-minimizing level of output, so they have excess capacity but monopolistically competitive firms do not.
Profit-maximizing, monopolistically competitive firms:
consider the actions of their competitors when determining price.
do not consider the actions of their competitors when determining price.
consider only marginal cost and marginal revenue, which determine the level of output—and the level of output determines price.
consider only average total cost and average variable cost, which determine the level of output—and the level of output determines price.
take their price from the industry price, as do perfectly competitive firms.
f a monopolistically competitive firm is incurring losses, then at the profit-maximizing output amount:
price is above the average total cost curve.
price is below the average total cost curve.
price is equal to marginal revenue.
price is less than marginal revenue.
average total costs equals marginal cost.
a monopolistically competitive industry is more competitive than any other industry form.
monopolies are more competitive than monopolistically competitive firms.
monopolistically competitive firms are located between monopoly and perfect competition.
all firms can make a long-run economic profit, but only perfect competitors can make a shortrun profit.
all firms engage in short-run loss minimization by selecting the point where marginal revenue = price.
Excess capacity best describes the fact that:
monopolistically competitive firms produce less than the cost-minimizing level of output.
monopolistically competitive firms produce more than the cost-minimizing level of output.
monopolistically competitive firms produce exactly the cost-minimizing level of output, but the monopolistically competitive industry produces more than that amount.
monopolistically competitive firms could produce less if they wanted to, so they produce over the optimal capacity.
perfectly competitive firms produce less than the cost-minimizing level of output, so they have excess capacity but monopolistically competitive firms do not.
Profit-maximizing, monopolistically competitive firms:
consider the actions of their competitors when determining price.
do not consider the actions of their competitors when determining price.
consider only marginal cost and marginal revenue, which determine the level of output—and the level of output determines price.
consider only average total cost and average variable cost, which determine the level of output—and the level of output determines price.
take their price from the industry price, as do perfectly competitive firms.
f a monopolistically competitive firm is incurring losses, then at the profit-maximizing output amount:
price is above the average total cost curve.
price is below the average total cost curve.
price is equal to marginal revenue.
price is less than marginal revenue.
average total costs equals marginal cost.
Explanation / Answer
Q. The best description of industries below is that:
Ans : monopolistically competitive firms are located between monopoly and perfect competition.
Explanation :
Monopolistic market structure is a synthesis between monopoly and comptitive market structure.
Q. Excess capacity best describes the fact that:
Ans : monopolistically competitive firms produce less than the cost-minimizing level of output.
Explanation :
Excess capacity of a monopolistically competitive firm means in the long run its level of output is below the efficient scale ( minimum point of LAC).
Q. Profit-maximizing, monopolistically competitive firms:
Ans : consider only marginal cost and marginal revenue, which determine the level of output—and the level of output determines price.
Explanation :
Profit maximization condition is where , MC = MR
Q. a monopolistically competitive firm is incurring losses, then at the profit-maximizing output amount:
Ans : price is below the average total cost curve.
Explanation :
Loss = Per unit cost ( ATC ) is greater than the per unit price
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