Whether a market is perfectly competitive or monopolistically competitive depends on:

the presence of barriers to entry.

the ability of firms to collude.

there being a large number of firms in the industry.

the degree of product differentiation.

none of the above conditions.

QUESTION 16

Suppose a perfectly competitive firm is producing a level of output such that its average revenue is below its marginal cost, but above its average variable cost. The firm should

produce zero output.

reduce its output.

increase the market price.

not change its output.

expand its output.