1. Which of the following is not true about monopolistic competition, compared to monopoly?
All listed options are true.
Firms under both market structures face downward-sloping demand curves.
Monopolistic competition has more sellers.
Firms under both market structures have significant market power.
Both market structures have significant barriers to entry.
2. In the short run, in some industry, the monopolistic competitor earns positive economic profits. In the long run,
new firms will enter, but economic profits will remain positive for the firm described
new firms will enter until P = ATC
new firms cannot enter due to barriers to entry
some firms will leave, and economic profits will be zero