All of the following are true about a monopolist EXCEPT
A) the demand curve for its product is perfectly elastic.
B) it produces a product with no close substitutes.
C) its demand curve is the same as the market demand for the industry.
D) it is a single seller of a good or service.
Answer: A
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Monopolistically competitive markets differ from perfectly competitive markets due to (i) the number of sellers. (ii) the barriers to entry. (iii) the product differentiation among the sellers
a. (i) only b. (iii) only c. (i) and (iii) only d. (ii) and (iii) only
As firms enter a monopolistically competitive market in the long run:
A. price increases, the market quantity demanded increases, and the quantity supplied by an individual firm increases. B. price decreases, the market quantity demanded increases, and the quantity supplied by an individual firm decreases. C. price decreases, but firm profits increase as average costs decrease. D. price increases and firm profits increase.