11) If a firm faces a downward-sloping demand curve, A) the demand for its product must be inelastic. B) it can control both price and quantity sold. C) it must reduce its price to sell more units. D) it will always make a profit. 12) A monopolistically competitive firm faces a downward-sloping demand curve because A) it is able to control price and quantity demanded. B) there are few substitutes for its product. C) of product differentiation. D) its market decisions are affected by the decisions of its rivals. 13) A monopolistically competitive firm will A) charge the same price as its competitors do. B) always produce at the minimum efficient scale of production. C) have some control over its price because its product is differentiated. D) produce an output level that is productively and allocatively efficient. 14) Which of the following is true of a typical firm in a monopolistically competitive industry? A) Product differentiation allows a successful firm to emerge as a market leader in the industry. B) All firms have identical cost structures. C) The more successful firms have an incentive to merge in order to exert greater market power. D) Each firm acts independently. 15) For a monopolistically competitive firm, marginal revenue A) equals the price. B) is greater than the price. C) is less than the price. D) and price are unrelated. 16) If the demand curve for a firm is downward-sloping, its marginal revenue curve A) will lie above the demand curve. B) will lie below the demand curve. C) is the same as the demand curve. D) is horizontal. 17) When a monopolistically competitive firm cuts its price to increase its sales, it experiences a gain in revenue due to the A) substitution effect. B) income effect. C) price effect. D) output effect. 18) When a monopolistically competitive firm cuts its price to increase its sales, it experiences a loss in revenue due to the A) substitution effect. B) income effect. C) price effect. D) output effect. Â Â Â Â 19) Refer to Table 11-1. What is the marginal revenue of the 3rd unit? A) $6.50 B) $5.50 C) $1.83 D) $0.50 20) Refer to Table 11-1. The Table shows A) an elastic segment of the demand curve. B) an inelastic segment of the demand curve. C) a demand curve with an elastic segment of the demand curve from $7.50 to $6.50 followed by an inelastic segment. D) a demand curve with an inelastic segment of the demand curve from $7.50 to $6.50 followed by an elastic segment.