27. Which of the following is a characteristic of monopolistic competition?
A) Easy entry and exit
B) Few firms
C) Strategic dependence
D) Homogeneous products

29. Firms that produce an information product experience short-run economies of operation because
A) of the U-shaped nature of the average total cost curve.
B) the average total cost of producing and selling the product declines as output increases.
C) of the U-shaped nature of the average variable cost curve.
D) the firm will always produce in the decreasing portion of the marginal cost curve.

30. An information product is a product for which
A) the first unit is very costly to make but additional units are less costly to produce.
B) the first item is produced inexpensively but additional units are more costly to produce.
C) the marginal cost first falls and then rises but the average total cost rises throughout its range.
D) the average fixed cost first falls and then rises, but the average total cost falls throughout its range.

31. Which of the following statements is INCORRECT regarding the properties of information products?
A) The average total cost curve for a firm that sells an information product slopes upward.
B) Providing an information product entails incurring relatively high fixed costs.
C) The firm experiences economies of operation in the short run.
D) In the long run, the producer earns sufficient revenue to cover the opportunity cost of capital.

33. A monopolistically competitive firm finds its profit-maximizing rate of output by equating
A) marginal revenue and marginal cost.
B) price and marginal cost.
C) average revenue and average total cost.
D) the marginal revenue of advertising with the marginal cost of advertising.
35. Unrestricted entry and exit into the market is found in
A) perfect competition, monopolistic competition and oligopoly.
B) monopolistic competition and oligopoly.
C) perfect competition and monopolistic competition.
D) perfect competition and oligopoly.

36. Retail trade is an example of
A) monopoly.
B) perfect competition.
C) oligopoly.
D) monopolistic competition.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Answer 27 D Homogeneous products Answer 29 B the average total cost of producing and sell... View the full answer