Question: Hello, I need help knowing why these are true or false please. A brief explanation would be helpful. Thank you! When a firm operates with
Hello, I need help knowing why these are true or false please. A brief explanation would be helpful. Thank you!


When a firm operates with excess capacity, it must be in a monopolistically competitive market. True The term excess capacity refers to the fact that a firm produces a lower quantity than it would if it operated at the efficient scale. False The government may not be able to improve the inefficiencies of a monopolistically competitive market. True Firms in monopolistically competitive markets and monopolies can earn long-run profits due to barriers to entry. True A profit-maximizing firm in a monopolistically competitive market charges a price equal to marginal cost. False Product differentiation always leads to some measure of market power. TrueA firm in a monopolistically competitive market can earn both short-run and long-run profits. False The debate over whether advertising serves a valuable purpose in society is definitively answered by economists who study the tastes and preferences of individuals. False
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