1. A monopolistically competitive firm sets its price equal to its MR, while keeping it above MC.

True

False

2. We say that the long-run equilibrium of a monopolistically competitive firm reflects excess capacity because its MC is not equal to its ATC.

True

False

3. In a duopoly with a zero marginal cost, according to the Cournot model, at equilibrium the sum of the two firms' output would be more than 50 percent of the market demand at a zero price.

True

False

4. In the kinked demand curve model it is assumed that the demand faced by an oligopoly is less elastic when it lowers the price but more elastic when it raises the price.

True

False

5. A distinguishing characteristic of monopolistically competitive market is price discrimination.

True

False

6. The general explanation for the relative price stability in an oligopolistic market is the existence of some degree of decision interdependency among the firms in the market.

True

False