Micro Economics For Today
Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
Question
Chapter 9, Problem 19SQ
To determine

 The price charged by the perfectly competitive firm and monopolist.

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The major difference between a monopolistic competition and monopoly is, a. monopoly is a price taker and a firm in monopolistic competition is a price maker. b. there are barriers to entry and exit in monopolistic competition and freedom to enter and exit in monopoly. c. only a monopoly can earn an abnormal profit in the long run. d. None of these.
Do you expect that an increase in the price of a product generates a larger decrease in quantity demanded for a monopolistically competitive firm than it would for a monopoly? a/ yes; consumers will buy from competitors offering lower priced substitutes b/  no; conditions of imperfect competition means demand is constant c/  no; a monopolistic competitor perceives demand as a price maker d/  yes; but temporarily because price increases only create a short-run decline
Which of the following statements about a monopoly is true?  (a)  The monopolist has a flat demand curve because of high barriers to entry. (b)  For a monopolistic firm, profit will be maximised where price = marginal revenue. (c)  In the long run, a monopolist can earn only normal profits. (d)  Price, in the long run, is not usually equal to the minimum average total cost.
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