Microeconomics, some questions I need help with, please help!?

Posted on 2014-12-03 06:46:00 in Economics by ANGEL

1. General Snacks is a typical firm in a market characterized by the model of monopolistic competition. Initially, the market is in long-run equilibrium, and then there is an increase in demand for snacks. In the short run the price of snacks will ________ and the output of services will ________.

A) rise; rise
B) fall; fall
C) remain unchanged; remain unchanged
D) rise; fall.

2. To maximize profit, a monopolistically competitive firm should produce the level of output at which:

A) marginal revenue equals price.
B) price equals total cost.
C) marginal revenue equals marginal cost.
D) price equals marginal cost.

3. In long-run equilibrium in monopolistic competition:

I'd be really thankful if someone could help me understand this...

A) price is equal to average total cost at an output less than the output at which average total cost is minimized.

B) price is equal to average total cost at an output greater than the output at which average total cost is minimized.

C) price is equal to average total cost at its minimum.

D) price is greater than average total cost

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