Question

Which of the following is a characteristic of both monopolistic competition and monopoly? Group of answer choices

i. Firms face significant barriers to entry.

ii. A firm's marginal revenue curve is below its demand curve.

iii.In the long run, a firm will earn zero economic profit.

iv In the long run, a firm will produce a level of output that corresponds to the minimum point of its average total cost curve.

Answer 1

ii. A firm's marginal revenue curve is below its demand curve.

Reason- Both Monopoly and monopolist competition has MR curve below the demand curve because both firms can raise the quantity only when price falls.

Only monopoly faces significant barries to entry.

Only firms in monopolist competition have zero economic profit in the long run and produce at minimum of average total cost curve.