Under monopolistic competition, the most likely outcome is for Group of answer choices productive efficiency. the...

Under monopolistic competition, the most likely outcome is for

Group of answer choices

productive efficiency.

the absence of advertising expenditures.

price to equal marginal revenue.

price to exceed marginal cost.

none of the other answers are correct.

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Question 142 pts

Which statement is true?

Group of answer choices

A firm's explicit costs are the opportunity costs of using the resources that it already owns to make the firm's own product rather than selling those resources to outsiders for cash.

If demand is elastic, a decrease in price will increase total revenue.

Diseconomies of scale explain the downward sloping part of the long-run ATC curve.

Average revenue is the total amount the seller receives from the sale of a product in a particular time period.

Marginal cost reaches its minimum point just as marginal product reaches its minimum point as well.

In the most competitive of industries, the surviving firms will earn huge economic profit over the longer run.

Solutions

Expert Solution

Under monopolistic competition, the most likely outcome is for price to exceed marginal cost.

In a monopolistic competitive market, firms always set the price greater than their marginal costs, which means the market can never be productively efficient.

Only one statement which is true is If demand is elastic, a decrease in price will increase total revenue.

When the demand is elastic, there exists an inverse relationship between price and total revenue.

Rahul Sunny answered 1 year ago

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