How does the MR line look like? (Downward sloping, horizontal, or vertical)?
Is the MR equal, below, or above the demand curve? Choose one.
Is the demand curve for a monopolistic competitive firm flatter or steeper than the
demand curve for a monopolist?
The demand curve of a monopolistically competitive
firm is steeper than the demand curve for a monopolist.
If the price is less than ATC for a monopolistic competitive firm, Does the firm make
profit, loss, or break even? Choose one.
If the price is greater than ATC, Does the monopolistic firm make profit, loss, or
break even? Choose one.
Does the monopolistic firm make profit, losses, or zero economic profit in the long
run? Choose one.
Compared to a pure competitive firm in the long run, a monopolistic firm will charge
higher or lower price? Will produce more or less; have more less economic profit that
is equal to what? Give a number for economic profit for both pure competitive firm
and monopolistic competitive firm.
Monopolistic firm charges a higher price. It will
produce less and earn more economic profit. Economic profit for firms in perfect
competition and monopolistic competition is 0.