32. Which of the following is not a difference between monopolies and perfectly competitive markets?
| A. Monopolies face downward sloping demand curves while perfectly competitive firms face horizontal demand curves. | | |
| B. Monopolies charge a price higher than marginal cost while perfectly competitive firms charge a price equal to marginal cost. | | |
| C. Monopolies can earn profits in the long run while perfectly competitive firms break even. | | |
| D. Monopolies choose to produce the quantity at which marginal revenue equals marginal cost while perfectly competitive firms do not. | |
40. Which of the following statements is not correct?
| A. Both monopolies and monopolistically competitive firms can earn economic profits in the long run. | | |
| B. Both monopolistically competitive and perfectly competitive firms can earn economic profits in the short run. | | |
| C. Only competitive firms produce the welfare-maximizing level of output. | | |
| D. Firms in perfect competition, monopolistic competition, and monopoly maximize profits by producing where marginal revenue equals marginal cost. | |
43. A monopolistically competitive firm is currently producing 20 units of output. At this level of output the firm is charging a price equal to $20, has marginal revenue equal to $12, has marginal cost equal to $12, and has average total cost equal to $18. From this information we can infer that
| A. the profits of the firm are negative. | | |
| B. firms are likely to leave this market in the long run. | | |
| C. the firm is currently maximizing its profit. | | |
| D. All of the above are correct. | |
