Profit maximizing monopolistically competitive firm

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Reference no: EM131112372

The short-run equilibrium for a profit maximizing monopolistically competitive firm is at price = $29, average total cost = $22. The firm's marginal cost is $18. Which of the following is true?

A.) More firms will be attracted into the industry B.) The firm could decrease the price and increase profits C.) Per-unit profit is $11 D.) The firm could increase the price and increase profits E.) The firm is operating in the upward-sloping portion of average total cost (ATC)

Similarily, a neighborhood convenience store is generally able to charge a higher price for its candy bars than the town’s Wal-Mart Super Center because the convenience store:

A.) differentiates based on location B.) differentiates based on style C.) differentiates based on quality D.) advertises that its candy bars are identical to those sold at Wal-Mart E.) differentiates based on high barriers to entry, such as patents.

Reference no: EM131112372

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