Question

Question 1

In the framework of monopolistic competition, which of the following is not a possible outcome for a firm that runs a successful advertising campaign?

Select the correct answer below:

allocative efficiency

the ability of the firm to charge a higher price

the ability of the firm to sell a greater quantity

an increase in profits for the firm

Question 2

In a market characterized by monopolistic competition, how will new firms choose to engage this market?

Select the correct answer below:

Firms will enter the market to avoid losing economic profits that occur in perfect competition.

As long as the firms in the market are earning positive economic profits, new competitors will want to enter the market to earn those profits too.

As long as the firms in the market are earning positive economic profits, entry into the market is not possible.

As long as the firms in the market are losing economic profits, new competitors will continue to enter the market to try to earn what other firms lose.

3-Average profit, or profit divided by quantity, is also known as ________.

Select the correct answer below:

total profit

profit margin

revenue

complete profit

Answer 1