Which of the following statements is not correct?
a. The typical monopolistically competitive firm could reduce its average total cost if it produced more output.
b. Monopolistically competitive firms advertise in order to increase the elasticity of the demand curve they face.
c. Expensive advertising might help consumers if it is a signal that the product is good.
d. Brand names acquired at great cost might help consumers by assuring quality.
b
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Which of the following statements applies to a monopolist but not to a perfectly competitive firm at their profit-maximizing outputs?
A) Average revenue equals average cost. B) Marginal revenue is less than price. C) Price equals marginal cost. D) Marginal revenue equals marginal cost.