Price And Average Total Cost Being Equal And Difference Between Competition And Monopolistic Competition


1. Price is equal to average total cost if the firm:
A.    is never in productive equilibrium.
B.    is earning a normal rate of profit.
C.    is earning zero profits.
D.    needs to cut costs in the short run.

Use the following data
Labor    Quantity
  1        9
  2      20
  3      33
  4      40

2. The main similarity between competition and monopolistic competition is that:
A.    competition has many sellers selling a product, while monopolistic competition has one firm selling many products.
B.    both make no economic profit in the long run.
C.    a competitive market has many buyers, while monopolistic competition has only one buyer.
D.    both produce standardized products.


These multiple choice questions belong to Economics. The 1st question discusses about price and total cost being equal and the 2nd question is about the similarity between competition and monopolistic competition.

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