The Figure Given Below Shows the Cost and Revenue Curves

question 32

Multiple Choice

The figure given below shows the cost and revenue curves of a monopolist.Figure 11.9
D: Average revenue
MR: Marginal revenue
ATC: Average total cost
MC: Marginal cost
-When the existing firms in a monopolistically competitive industry earn above-normal profit:

• A)new firms enter into the market, and entry continues until firms earn normal profit.
• B)new firms have no incentive to enter the market.
• C)new firms have an incentive to enter the market but are legally barred from doing so.
• D)they increase their production and lower the price level.
• E)their cost structure automatically changes, eliminating the additional profit.

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