FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 15: Monopolistic Competition and Product Differentiation

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 111

Multiple Choice

Review LaterAdd Note

Review Later

Figure: Monopolistic Competitor (Figure: Monopolistic Competitor) If the firm shown in the figure Monopolistic Competitor profit-maximizes, it will:

A) earn a positive economic profit.
B) break even.
C) incur a loss.
D) incur a loss equal to its MR.

E) B) and C)
F) A) and C)

Correct Answer

verified

Show Answer

Question 112

Multiple Choice

Review LaterAdd Note

Review Later

Figure: Profits in Monopolistic Competition (Figure: Profits in Monopolistic Competition) Look at the figure Profits in Monopolistic Competition.A long-run equilibrium is illustrated at the profit-maximizing price ________ in panel _.

A) A; A
B) E; B
C) B; A
D) N; C

E) A) and B)
F) B) and D)

Correct Answer

verified

Show Answer

Question 113

Multiple Choice

Review LaterAdd Note

In long-run equilibrium in perfect competition:

The demand curve for a firm operating within a monopolistically competitive industry is:

Suppose the dry-cleaning market is monopolistically competitive and economically profitable this year.In the long run, the demand for any one firm's dry-cleaning services will ________ as more firms enter the industry, causing profits to _.

The failure to produce enough to minimize average total cost is termed:

An industry with a few interdependent firms is best described as:

The downward-sloping demand curve for a monopolistically competitive firm:

A monopolistically competitive firm will earn maximum profit if it produces at the lowest possible average total cost.True

The market for grade A large eggs in the state of California is best considered to be:

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

If a firm operating within monopolistic competition is producing a quantity that generates MC < MR, then the marginal decision rule tells us that profit:

Figure: Profit Maximization in Monopolistic Competition (Figure: Profit Maximization in Monopolistic Competition) Look at the figure Profit Maximization in Monopolistic Competition.When the demand curve for a firm in monopolistic competition shifts, the marginal revenue curve:

Monopolistic competition within an industry results in:

In many cities you can stay at a Holiday Inn in the downtown area, in a suburban community, or near the airport.These Holiday Inn establishments are examples of product differentiation by:

All advertising is clearly a waste of resources.True

Figure: The Market for Gas Stations (Figure: The Market for Gas Stations) The figure Market for Gas Stations shows curves facing a typical gas station in a large town.The market is characterized by many firms, differentiated products, easy entry, and easy exit.If the gas station shown here were to raise its price above the profit-maximizing price, it would experience:

Figure: The Restaurant Market (Figure: The Restaurant Market) The figure The Restaurant Market shows curves facing a typical restaurant in a community.Assume that many firms, differentiated products, and easy entry and easy exit characterize the restaurant market.For the restaurant shown here, the profit per unit is:

(Table: Spring Water) The table Spring Water shows the demand and cost data for a firm in a monopolistically competitive industry producing drinking water from underground springs.At the profit-maximizing output, profit is:

Figure: The Market for Gas Stations (Figure: The Market for Gas Stations) The figure The Market for Gas Stations shows curves facing a typical gas station in a large town.The market is characterized by many firms, differentiated products, easy entry, and easy exit.If the gas station here is typical of others in the community, then in the long run, we would expect to observe: