1. Which of the following statements is true?
The more elastic the demand, the higher the profit-maximizing markup.
The more elastic the demand, the lower the profit-maximizing markup.
The higher the marginal cost, the lower the profit-maximizing pric
The higher the average cost, the lower the profit-maximizing price.
2. In the short run, a monopolistic competitor generally behaves like ____________; in the long run, the market structure becomes _________ competitive due to free entry and exit.
a monopoly; less
a perfectly competitive firm; less
a monopoly; more
a perfectly competitive firm; more