Answer to Question #184992 in Microeconomics for James

Question

QUESTION 8

The demand curve facing a monopolistically competitive firm is:

1. Perfectly elastic.
2. Perfectly inelastic.
3. More elastic than that of a monopoly.
4. Less elastic than that of a monopoly.
5. More elastic than in perfect competition. 

QUESTION 9

If a monopolistic competitor raises its price:

1. It will lose revenue.
2. It will gain revenue.
3. The firm’s revenue will remain unchanged.
4. It will lose more customers than would a monopoly that raised its price.
5. It will lose fewer customers than would a monopoly that raised its price.

QUESTION 10

The process by which a monopolistic competitor chooses its profit-maximizing quantity and price:

1. Resembles closely how a monopoly makes these decisions.
2. Resembles closely how a perfectly competitive firm makes these decisions.
3. Resembles closely how a firm in oligopoly makes these decisions.
4. Resembles no other market structure decision-making processes.
5. All of the above.

Answer 1

QUESTION 8

The answer is option #3: More elastic than that of a monopoly.

QUESTION 9

The answer is option #3: It will lose more customers than would a monopoly that raised its price.

QUESTION 10

The answer is option #1: Resembles closely how a monopoly makes these decisions.