Monopolistic competitor generally behaves

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1. Which of the following statements is true?

The more elastic the demand, the higher the profit-maximizing markup.

The more elastic the demand, the lower the profit-maximizing markup.

The higher the marginal cost, the lower the profit-maximizing pric

The higher the average cost, the lower the profit-maximizing price.

2. In the short run, a monopolistic competitor generally behaves like ____________; in the long run, the market structure becomes _________ competitive due to free entry and exit.

a monopoly; less

a perfectly competitive firm; less

a monopoly; more

a perfectly competitive firm; more

Reference no: EM131393488

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