When firms enter a monopolistically competitive market and the business-stealing externality is larger than the product-variety externality then ?

Related Mcqs:

Which of the following is true regarding the similarities and differences in monopolistic competition and monopoly ?

A. the monopolist faces a downward-sloping demand curve while the monopolistic competitor faces an elastic demand curve B. the monopolist charges a price above marginal cost while the monopolistic competitor charges a price equal to marginal cost C. The monopolist makes economic profits in the long run while the monopolistic competitor makes zero economic profits … Which of the following is true regarding the similarities and differences in monopolistic competition and monopoly ?Read More...

Which of the following is true regarding the production and pricing decisions of monopolistically competitive firms? Monopolistically competitive firms choose the quantity at which marginal cost equals ?

A. marginal revenue and then use the demand curve to determine the price consistent with this quantity B. average total cost and then use the supply curve to determine the price consistent with this quantity C. marginal revenue and then use the supply curve to determine the price consistent with this quantity D. average total … Which of the following is true regarding the production and pricing decisions of monopolistically competitive firms? Monopolistically competitive firms choose the quantity at which...

Which of the following is true with regard to monopolistically competitive firms scale of production and pricing decisions Monopolistically competitive firms produce ?

A. at the efficient scale and charge a price equal to marginal cost B. at the efficient scale and charge a price above marginal cost C. With excess capacity and charge a price above marginal cost D. With excess capacity and charge a price equal to marginal cost...

Which of the following firms is most likely to spend a large percentage of their revenue on advertising ?

A. the producer of a highly differentiated consumer product B. the manufacturer of an undifferentiated consumer commodity C. a perfect competitor D. The manufacturer of an industrial product E. The producer of a low-quality product that costs the same to produce as a similar high-quality product...

Which of the following is not put forth as a criticism of advertising and brand names ?

A. Advertising manipulates people’s tastes to create a desire that otherwise would not exist B. Advertising increase competition Which causes unnecessary bankruptcies and layoffs. C. Advertising increases brand loyalty causes demand to be more inelastic and thus, increase mark-up over marginal cost. All of these answers are criticisms of advertising and brand names...