Monopolistic competition differs from perfect competition primarily because ?

A. In monopolistic competition entry into the industry is blocked
B. In monopolistic competition there are relatively few barriers to entry.
C. In monopolistic competition, firms can differentiate their products
D. In perfect competition firms can differentiate their products

A monopolistically competitive firm that is incurring a loss will produce as long as the price that the firm charges is sufficient to cover ?

A. Marginal costs
B. Fixed costs
C. Variable costs
D. Advertising costs

The short run, as economists use the phrase, is characterized by ?

A. A period where the law of diminishing returns does not hold.
B. At least one fixed factor of production and firms neither leaving nor entering the industry
C. All inputs being variable
D. No variable inputs – that is all of the factors of production are fixed

In the long run ?

A. All firms must make economic profits.
B. There are no fixed factors of production
C. A firm can vary all inputs, but it cannot change the mix of inputs it uses.
D. A firm can shut down, but it cannot exit the industry

If the ABC Typing Service is earning a rate of return greater than the return necessary for the business to continue operations, then ?

A. Normal profit is zero
B. Total costs exceed total revenue
C. Total costs exceed normal profit
D. The firm is earning are economic profit

The normal rate of profit for relatively risk-free firms will be _________ the interest rate on risk-free government bonds?

A. Approximately one-half
B. Smaller than
C. Larger than
D. Approximately equal to

Maximum profit can be shown on a diagram using ?

A. The mr and mc curves
B. The ac and ar curves
C. The ac and mc curves
D. The mr and ar curves

If you were running a firm in a perfectly competitive industry, you would be spending your time making decisions on ?

A. How much to spend on advertising?
B. How much of each input to use?
C. What price to charge
D. None of these

When ________ substitutes exist, a monopolist has ________ power to raise price?

A. More; more
B. Fewer; less
C. More; less
D. No; infinite

Relative to a competitively organized industry a monopoly ?

A. Produces less output, charges higher prices and earns economic profits.
B. Produces less output, charges lower prices and earns only a normal profit
C. Produces more output, charges higher prices and earns economics profits
D. Produces less output, charges lower prices and earns economic profits