The Figure Below Shows the Revenue and Cost Curves of a Monopolistically

question 22

Multiple Choice

The figure below shows the revenue and cost curves of a monopolistically competitive firm.Figure: 12.2
In the figure,
D: Demand curve
MR: Marginal revenue curve
ATC₁ and ATC₂: Average total cost curves
MC: Marginal cost curve
-In contrast to perfect competition, in a monopolistically competitive industry:

• A)new firms entering the market produce a good that is identical to the existing ones.
• B)new firms entering the market produce a completely different product.
• C)there are legal restrictions on the entry of new firms.
• D)new firms entering the market produce a close substitute, not an identical or standardized product.
• E)new firms are allowed to enter the industry but there are legal restrictions on their exit.

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