• The sources of product differentiation do

not

include:

• The break-even price for a perfectly compet

itive firm is equal to:

• A monopolistically competitive firm is ope

rating in the short run at the optimal level of out

put and is earning

positive economic profits. Which of the following m

ust be true?

a.

P

>

ATC

=

MR

=

MC

b.

P

=

MR

=

MC

>

ATC

c.

MR

>

MC

and

P

=

ATC

d.

MR

=

MC

and

P

>

ATC

e.

MR

=

MC

and

P

=

ATC.

• Which of the following statements are reas

ons why a monopolistic competitor is likely to enga

ge in

advertising?

I. To create an greater perception of product diffe

rentiation in the minds of potential consumers

II. To shift the demand curve for its product righ

tward.

III. To convey information about the product it is

offering for sale.

a.

I only.

b.

II only.

c.

II and III only

d.

III only.

e.

I, II, and III.