A Monopolistically Competitive Firm Is Likely to Produce Less and Charge

question 61

Multiple Choice

A monopolistically competitive firm is likely to produce less and charge more than a perfectly competitive firm because

• A) a monopolistically competitive firm faces a downward-sloping demand curve; therefore, price is greater than marginal revenue.
• B) there is less demand for the monopolistically competitive firm's product.
• C) both firms equate marginal cost with average cost.
• D) a monopolistically competitive firm faces excessive competition.
• E) a monopolistically competitive firm faces different cost conditions.