1.1.1 A market with few entry barriers and with many firms that sell differentiated products is. Purely competitive A. B. A monopoly C. ABCD D. Monopolistic competition oligopolistic 1.1.2 The most important factor in determining the long-run profit potential in monopolistic competition is. Free entry and exit. ABCD A. B. The elasticity of the market demand curve C. The elastic of the firm's demand curve D. The reaction of rival firms to a change in price 1.1.3 Which of the following is NOT regarded as source of inefficiency in monopolistic competition? A. The fact that price exceeds marginal cost. B. Excess capacity C. Product diversity D. The fact that long-run average cost is not minimized. 1.1.4 Monopolistic competition firms have monopoly power because they A. B. C. D. Face downward sloping demand curves Are great in number. Have freedom of entry Are free to advertise. 1.1.5 A monopolistic competition firm in long-run will make will... negative profit. A. B. zero profit. C. positive profit. D. both positive and negative. TARGD 1.1.6 Which of the following is true for both perfect and monopolistic competition? A. Firms produce a differentiated product. B. Firms face a downward sloping demand curve. C. Firms produce a homogeneous product. D. There is freedom of entry and exit in the long run. 1.1.7 Which of the following is true in long-run equilibrium for a firm monopolistic compe- tition. MC=ATC B. MC>ATC ABCD C. MC​