SOLVED

61) Firms in monopolistic competition in the short run always A) set price above marginal cost. B) make an economic profit. C) set price equal to marginal cost. D) produce at the minimum average total cost. E) break even. 62) The profit-maximizing condition for a firm in monopolistic competition is to produce the quantity at which A) marginal cost equals price. B) price equals marginal revenue. C) average total cost equals price. D) marginal cost equals marginal revenue. E) average variable cost equals price. 63) In monopolistic competition, firms can make an economic profit in A) the short run but not in the long run. B) the short run and in the long run. C) the long run but not in the short run. D) neither the short run nor the long run. E) always in the short run and sometimes but not frequently in the long run. 64) In long-run equilibrium, a firm in monopolistic competition A) makes zero economic profit and operates with excess capacity. B) makes zero economic profit and produces above capacity output. C) makes a positive economic profit and operates with excess capacity. D) makes a positive economic profit and produces above capacity output. E) incurs an economic loss and exits the market. 65) A monopolistically competitive firm has excess capacity because in the A) long run, average total cost exceeds minimum average total cost. B) short run, marginal revenue exceeds marginal cost. C) long run, it makes an economic profit. D) short run, average total cost is less than average variable cost. E) long run, average total cost is less than average variable cost. 66) Which of the following statements regarding monopolistic competition is FALSE? A) Resources are used efficiently when marginal social benefit equals marginal social cost. B) A greater degree of product variety creates a loss because the quantity produced is less than the efficient quantity. C) Monopolistic competition is definitely inefficient because price exceeds marginal cost. D) Compared to a situation with total product uniformity, monopolist competition might be efficient. E) A firm in monopolistic competition produces a quantity that is less than the efficient scale. Â Â