Question

16) Compared to a perfectly competitive firm, the demand curve facing a monopolistically competitive firm is...

16) Compared to a perfectly competitive firm, the demand curve facing a monopolistically competitive firm is

a) more elastic because there are many close substitutes for the product of a monopolistically competitive firm.

b) less elastic because monopolistically competitive firms produce similar, but not identical, products.

c) just as elastic because there are many sellers in both markets.

d) more elastic because in the long run, the demand curve is tangent to the firm's average total cost curve.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Option B

  • Perfectly competitive firms are those firms who sell goods that are close substitutes of each other.
  • While monopolistically competitive firm are those firms who sells similar but not identical goods.
  • Due to many close substitutes,a perfectly competitive firms demand curve is highly elastic.
  • Due to very few substitutes as compared to perfectly competitive firms, monopolistically competitive firms are less elastic than the demand curve facing a perfectly competitive firm.
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The demand curve facing a firm will be more elastic, a. the fewer the number of...
The demand curve facing a firm will be more elastic, a. the fewer the number of competing firms b. the more differentiated the product c. the more substitutes there are for its product d. the greater the firm's ability to control price Because of easy entry, monopolistically competitive firms will             a.         produce at the lowest ATC.             b.         charge a price equal to MC.             c.         earn an economic profit equal to zero in the long run.             d.        ...
The demand curve of a monopolistically competitive firm is _________________ than that of a perfectly competitive...
The demand curve of a monopolistically competitive firm is _________________ than that of a perfectly competitive firm. Select the correct answer below: more elastic and flatter, less elastic and flatter, more elastic and steeper, less elastic and steeper
8. The demand curve of a monopolistically competitive firm is _______ elastic than the demand curve...
8. The demand curve of a monopolistically competitive firm is _______ elastic than the demand curve of a monopoly because the monopolistically competitive firm _______. Group of answer choices more, has competitors more, is a price maker more, is monitored more closely by the government less, only a few competitors less, exists in an environment without good information 10. Which of the following is not correct for a perfectly competitive firm? Group of answer choices price equals marginal revenue average...
A monopolistically competitive firm's demand curve is less elastic then a ______ firm's demand curve, but...
A monopolistically competitive firm's demand curve is less elastic then a ______ firm's demand curve, but more elastic than a _______ demand curve.
A profit-maximizing firm in a perfectly competitive market that is facing a price of $10 decides...
A profit-maximizing firm in a perfectly competitive market that is facing a price of $10 decides to produce 100 widgets. This results in an economic profit of $80. If the marginal cost of producing the 100th widget was $12 then this firm should: produce less than 100 set the price at $12 produce more than 100 continue producing 100 Which of the following is true for the firm in a perfectly competitive industry? There are no pricing decisions to be...
1. All of the following are characteristics of perfectly competitive markets, except: A: No barriers to...
1. All of the following are characteristics of perfectly competitive markets, except: A: No barriers to entry or exit (fully mobile) B: Large number of buyers & sellers C: A homogeneous product (not differentiated) D: Individual firms have the power to control price. 2. The individual firm's demand curve (as compared to the market demand curve) in a perfectly competitive market is: A: Perfectly inelastic (vertical) B: Downward sloping, but inside of the market demand curve. C: Perfectly elastic (horizontal...
Which of the following characterizes a perfectly competitive market? A downward-sloping demand curve facing the firm....
Which of the following characterizes a perfectly competitive market? A downward-sloping demand curve facing the firm. A selling price at the market-established equilibrium price. A few firms that compete by changing price. A horizontal demand curve for the market.
The demand curve for a perfectly competitive firm is ______, while the demand curve for a...
The demand curve for a perfectly competitive firm is ______, while the demand curve for a monopolist is ______. Multiple Choice perfectly elastic; perfectly inelastic perfectly elastic; downward-sloping perfectly inelastic; perfectly elastic vertical; downward-sloping
Long-run equilibrium in a monopolistically competitive market is similar to long-run equilibrium in a perfectly competitive...
Long-run equilibrium in a monopolistically competitive market is similar to long-run equilibrium in a perfectly competitive market in that in both markets, firms produce where price equals marginal cost. produce at the minimum point of their average total cost curves. break even. produce where price equals marginal revenue.
What is the defining characteristic of a monopolistically competitive firm? Select one: a. Monopolistically competitive firms...
What is the defining characteristic of a monopolistically competitive firm? Select one: a. Monopolistically competitive firms are price makers b. Differentiated product c. Monopolistically competitive firms do not make economic profits in the long run d. There are many small sellers in the market
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT