1. Why does a monopolist face the market demand curve?

a. Produces a homogeneous product

b. Presence of a large number of buyers in the market

c. Barred entry of any new firm in the market

d. Consumers have perfect knowledge of the market

e. Presence of a large number of substitutes

3. Which of the following is not true of monopolistic competition?

a.The firms produce differentiated products.

b.There exists free entry and exit of firms.

c.Each of the firms acts as a mini monopoly in the market.

d.Each of the firms faces a horizontal demand curve.

e.There are a large number of buyers and sellers.

4. A perfectly competitive firm cannot affect the market price by raising or reducing its supply of a product. T or F

5. When a firm's economic profit is greater than zero, the accounting profit is called normal profit. T or F