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In the short run, if the price is above average total cost in a monopolistically competitive market, the firm makes ?

A. losses and firms exit the market

B. profits and firms exit the market

C. losses and firms enter the market

D. profits and firms enter the market

Related Questions on Monopoly, Competition & Labour Market Mcqs

The use of word “competition” in the name of the market structure called “monopolistic competition” refers to the fact that ?

A. there are many sellers in a monopolistically competitive market and there is free entry and exit in the market just like a competitive market

B. Monopolistically competitive firms face a downward-sloping demand curve just like competitive firms.

C. Monopolistically competitive firms charge prices equal to the minimum of their average total cost just like competitive firms.

D. The products are differentiated in a monopolistically competitive market just like in a competitive market.