QUESTION 14 Which of the following is true A One might chara

QUESTION 14 Which of the following is true? A. One might characterize monopolistic competition as an industry, such as fast-food restaurants, which in the longrun experience zero economic profits. B. Monopolistic competition results in excess capacity, since in the long run MR MC is to the right of the minimum of the ATC curve OC. One might characterize monopolistic competition as an industry, such as gasoline stations, which in the long run experience large economic profits. D. Oligopoly is a goal toward which an economy should strivee

Solution

Q14. Answer is A. One might characterize monopolistic competition as an industry, such as fast food restaurants, which in the longrun experience zero economic profits. Q15. Answer is C. At the level at which marginal cost equals to marginal revenue.