1. How does a monopolistically competitive firm similar to a monopoly? (Multiple choices)

• Faces high barriers to entry.
• Can make profits or losses in the short run.
• Faces a downward-sloping demand curve.
• Makes economic profits in the long run.
• Produces where P > MR = MC.
• Has one seller.
• Can restrict output to increase price (at least in the short run).

2. How does advertising impact monopolistically competitive firms?

• It either causes a firm's perceived demand curve to become more elastic, or advertising causes demand for the firm's product to increase.
• Advertising expenses drive down average cost of production by increasing demand for the product and in turn increases total revenue.
• Advertising always causes monopolistically competitive firms to experience lower average costs.

3. Restrictive practices are characterized as...

• Practices the reduce competition without outright agreements to raise price or reduce quantity
• Practices that restrict the number of consumers who may purchase a product
• Practices that promote competition by restricting monopolies