Question: 1. In the short run, a monopolistically competitive firm ______.
A. may incur an economic loss
B. will leave the industry if it is incurring an economic loss
C. either earns an economic profit or breaks even
D. incurs an economic loss if it fails to produce the quantity at which marginal revenue equals marginal cost
2. In monopolistic competition _______.
A. a single firm can dictate market conditions
B. collusion is possible
C. each firm has limited power to influence the price of its product
D. each firm has a large market share
3. A profit-maximizing monopoly never produces an output in the _______ range of its _______ curve.
A. inelastic; demand
B. elastic; supply
C. unit elastic; marginal revenue
D. inelastic; supply
4. In the short run, a firm in monopolistic competition _______.
A. always makes an economic profit
B. makes its output and price decision just like a monopoly firm does
C. breaks even
D. incurs an economic loss