These are multiple choice

1.Monopolistic competition is a market structure in which

firms produce and sell products for which there are no close substitutes.

the demand curve for a typical firm is horizontal.

firms cannot influence the market price.

barriers to entry are low.

2.A monopolistically competitive firm that earns an accounting profit in the short run

must also earn an economic profit in the short run.

does not earn enough to earn an economic profit in the short run.

could earn an economic profit, break even, or suffer an economic loss in the short run.

could earn an economic profit or break even, but could not suffer an economic loss in the short run.

3.Patents, tariffs, and quotas are all examples of

government-imposed barriers.

economic regulations that increase efficiency.

entry barriers that improve a country's standard of living.

entry barriers that protect consumers.

4.For years, economists believed that market structure explained the ability of some firms to earn economic profits. For example, firms in industries with little competition and high barriers to entry would earn higher profits than firms in competitive industries with low entry barriers. Which of the following has caused economists to question this explanation and seek other explanations for why firms are profitable?

Studies have shown that, on average, firms in competitive industries earn higher profit rates than firms in industries with little competition.

In recent years, new technologies have increased the potential entry of new firms in industries with high entry barriers.

Studies have shown that firms in industries that have little competition and high entry barriers are not very profitable. Economists conclude from this that some competition is necessary in order to force firms to lower their costs and develop products that satisfy new consumer demands.

The market structure explanation fails to explain how firms in the same industry can have very different levels of profit.