How the firm faces in monopolistic competition

Question

1. The greater the price elasticity of the demand curve that the firm faces in monopolistic competition,

1. the lower the degree of competition in the industry.
2. the higher the degree of competition in the industry.
3. the fewer substitutes for the good produced.
4. the less sales the firm will gain from a price decrease.
5. the easier it is for the firm to raise its price.

2. Along a downward-sloping monopoly demand curve,

1. marginal revenue is equal to zero when price is equal to zero.
2. elasticity of demand is constant.
3. marginal revenue is greater than price.
4. marginal revenue decreases when price decreases.

3. At the point of long-run equilibrium for a perfectly competitive firm, economic profits are zero.

1. TR < TC.
2.  TR > TC.
3. P = AVC.
4. normal profits are zero.

4. A monopolist faces

1. the market demand curve.
2. a portion of the market demand curve.
3. a perfectly elastic demand curve.
4. an upward-sloping demand curve.
5. no demand curve, because demand is not important to the monopolist.

5. If a monopoly firm observes an increase in total revenue following a price increase, which of the following must be true?

1. MR = TR
2. MR < 0
3. MR > 0
4. MR = 0