Question

35. With monopolistic competition, society is willing to pay more for the product than it costs society to produce it.

a.True

b.False

36. Why does the short-run equilibrium situation usually not last long?

a.Government regulations are applied in the long run.

b.Higher taxes are enforced in the long run.

c.Firm downsizing happens in the long run.

d.Entry and exit happen in the long run.

37. Which of the following types of efficiency are monopolistically competitive firms able to achieve?

a.surplus efficiency

b.None - they are not efficient.

c.allocative efficiency

d.productive efficiency

38. Which of the following is not an example of possible product differentiation in a clothing store:

a.low prices

b.zero economic profits

c.a cool store atmosphere

d.great customer service

39.Which of the following is an accurate statement about monopolistic competition?

a.It sells virtually identical products.

b.It has a low level of competition among sellers.

c.It has characteristics of both monopoly and perfect competition.

d.It has no need to use advertising.

40.Which of the following is a typical example of monopolistic competition?

a.a chain restaurant

b.an apple orchard

c.a wheat farm

d.an electricity company

Answer 1

Answer
35. False
Not necessarily, for a good which is making profit for the producer then it holds true.

36 Entry and exit happen in the long run.
News frims enter and exit depending upon whether the industry is making profit or not

37 Surplus efficiency
As goods are differentiated, this makes goods cater and customised to the varied demand of the customer increasing surplus.

39It has characteristics of both monopoly and perfect competition.
In the short run it ears economic profits like monopoly, in the long run it makes zero economic profits like perfect competition

40 chain resturaunt
even in chain resturants it has been seen there are sliht variations in the menu to cater the need and preferences of the population

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