Which of the following is most likely the most beneficial form of monopoly advantage?
A) better production methods
B) input hoarding
C) decreasing returns to scale
D) government protection
A
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What is required for a market to be considered monopolistically competitive? How does the equilibrium in a monopolistically competitive market resemble that in a perfectly competitive market? How are they different?
What will be an ideal response?
A firm sells a product in a perfectly competitive market. The marginal cost of the product at the current output level of 200 units is $4. The minimum possible average variable cost is $3.50. The market price of the product is $3. To maximize profits or minimize losses, the firm should
A. shut down. B. continue producing 200 units. C. increase production to more than 200 units. D. decrease production to less than 200 units.