2. Generally, firms in monopolistically competitive industries do not earn long-run economic profits because: high barriers to entry deter new firms from entering the industry. high economies of scale reduce production costs. low barriers to entry enable new firms to enter the industry. few brands compete for consumers' purchases. Incorrect ENG US 3. A graph that illustrates the interaction of demand, marginal revenue and the determination of short-run profit maximizing actions is similar for firms in and industries. oligopolistic; perfectly competitive monopolistically competitive; perfectly competitive monopolistic; monopolistically competitive monopolistic; perfectly competitive 4. Monopolistically competitive markets generally keep prices much lower than a monopoly; nevertheless, they are not as low as in perfectly competitive markets because: the many brands in a monopolistically competitive market mean that economies of scale (and lower costs) are harder to realize. monopolistically competitive firms produce products that are identical to those produced by other firms. most consumers prefer the higher priced products produced by firms in monopolistically competitive industries. there are few firms in perfectively competitive markets, so prices are lower. 5. In the short-run, firms in monopolistically competitive markets can earn such firms typically earn economic profits. zero: positive negative; negative O positive; positive O positive; zero economic profits and, in the long-run, 6. An oligopoly consists of few large; low few large; high many small; high many small; low firms and barriers to entry