Question 1

When an industry has many firms,the industry is

Accepted Answer

A)   an oligopoly if the firms sell differentiated products,but it is monopolistically competitive if the firms sell identical products.
B)   an oligopoly if the firms sell differentiated products,but it is perfectly competitive if the firms sell identical products.
C)   monopolistically competitive if the firms sell differentiated products,but it is perfectly competitive if the firms sell identical products.
D)   perfectly competitive if the firms sell differentiated products,but it is monopolistically competitive if the firms sell identical products.E) C) and D)
F) None of the above

Question 2

In markets where restrictions on advertising have been used to curtail competition,the U.S.courts have generally

Accepted Answer

A)   referred the matters of advertising restrictions to executive regulators.
B)   enforced industry-wide agreements to restrict advertising.
C)   been silent on the effect of explicit advertising restrictions.
D)   overturned laws that prohibit advertising.E) A) and B)
F) All of the above

Question 3

Critics of markets that are characterized by firms that sell brand name products argue that brand names encourage consumers to pay more for branded products that

Accepted Answer

A)   have elastic demand curves.
B)   are very different from generic products.
C)   are indistinguishable from generic products.
D)   consumer-advocate groups have found to be inferior.E) C) and D)
F) A) and B)

Question 4

Empirical evidence suggests that advertising usually leads to an increase in the price for advertised products.

Accepted Answer

A) True 
 B)False

Question 5

Monopolistic competition and monopoly are examples of a market structure called imperfect competition.

Accepted Answer

A) True 
 B)False

Question 6

In a monopolistically competitive market,

Accepted Answer

A)   there are only a few sellers.
B)   each firm takes the price of its product as given.
C)   firms can enter or exit the market without restrictions.
D)   each firm produces a product that is essentially identical to the products of other firms in the market.E) B) and C)
F) None of the above

Question 7

Table 16-2
The following table shows the total output produced by the top six firms as well as the total industry output for each industry.
 
-Refer to Table 16-2.What is the concentration ratio for Industry A?

Accepted Answer

A)   about 71%
B)   about 81%
C)   about 88%
D)   100%E) C) and D)
F) B) and D)

Question 8

In which of the following market structures can firms earn economic profits in the long run?

Accepted Answer

A)   perfect competition
B)   monopolistic competition
C)   monopoly
D)   Both b and c are correct.E) B) and C)
F) A) and B)

Question 9

In the long run,monopolistically competitive firms produce where demand equals average total cost.

Accepted Answer

A) True 
 B)False

Question 10

Figure 16-4 
-Refer to Figure 16-4.Which of the panels shown could illustrate the short-run situation for a monopolistically competitive firm?

Accepted Answer

A)   panel a
B)   panel b
C)   panel c
D)   All of the above are correct.E) None of the above
F) A) and B)

Question 11

Figure 16-8
The figure is drawn for a monopolistically-competitive firm. 
-Refer to Figure 16-8.In response to the situation represented by the figure,we would expect

Accepted Answer

A)   new firms to enter the market.
B)   some of the firms that are currently in the market to exit.
C)   this firm's profit to move from its current value toward a positive value.
D)   None of the above are correct.E) A) and D)
F) A) and C)

Question 12

Table 16-6
Traci's Hairstyling is one salon among many in the market for hairstyling.The following table presents cost and revenue data for haircuts at Traci's Hairstyling.
 
-Refer to Table 16-6.At the profit-maximizing quantity,what is Traci's total profit?

Accepted Answer

A)   $30
B)   $59
C)   $77
D)   $84E) A) and B)
F) None of the above

Question 13

Figure 16-2 
-Refer to Figure 16-2.If this firm profit-maximizes,how much cost will it incur?

Accepted Answer

The answer of Figure 16-2 
-Refer to Figure 16-2.If this...

Question 14

Monopolistic competition differs from perfect competition because in monopolistically competitive markets

Accepted Answer

A)   there are barriers to entry.
B)   all firms can eventually earn economic profits.
C)   each of the sellers offers a somewhat different product.
D)   strategic interactions between firms are important.E) A) and B)
F) A) and C)

Question 15

Since a firm in a monopolistically competitive market faces a

Accepted Answer

A)   downward-sloping demand curve,it will always operate with excess capacity.
B)   downward-sloping demand curve,it will always operate at its efficient scale.
C)   perfectly elastic demand curve,it will always operate with excess capacity.
D)   perfectly inelastic demand curve,it will always operate at its efficient scale.E) A) and B)
F) C) and D)

Question 16

A monopolistically competitive market

Accepted Answer

A)   is imperfectly competitive,and all imperfectly competitive markets are monopolistically competitive.
B)   is imperfectly competitive,but not all imperfectly competitive markets are monopolistically competitive.
C)   is imperfectly competitive,whereas an oligopolistic market is not imperfectly competitive.
D)   is not imperfectly competitive.E) A) and D)
F) All of the above

Question 17

Economists are unanimous in their belief that advertising is socially inefficient.

Accepted Answer

A) True 
 B)False

Question 18

The market for novels is

Accepted Answer

A)   perfectly competitive.
B)   a monopoly.
C)   monopolistically competitive.
D)   an oligopoly.E) C) and D)
F) A) and B)

Question 19

Figure 16-2
This figure depicts a situation in a monopolistically competitive market. 
-Refer to Figure 16-2.Which of the following will occur in the long run in this industry?

Accepted Answer

A)   Firms will exit this industry.
B)   Firms will enter this industry.
C)   This firm will continue to earn positive economic profits.
D)   This firm will incur losses.E) B) and C)
F) A) and D)

Question 20

In many college towns,private independent bookstores typically locate on the periphery of the college campus.However,in some college towns,the university has used political power to restrict private bookstores near campus through community zoning laws.Use your knowledge of markets to predict the price and quality of service differences in the market for college textbooks under the two different market regimes.

Accepted Answer

In monopoly markets,price will...

Exam 16: Monopolistic Competition

When an industry has many firms,the industry is

Correct Answer
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Figure 16-2 -Refer to Figure 16-2.If this firm profit-maximizes,how much cost will it incur?

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Since a firm in a monopolistically competitive market faces a

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Figure 16-2 This figure depicts a situation in a monopolistically competitive market. -Refer to Figure 16-2.Which of the following will occur in the long run in this industry?

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Figure 16-4 -Refer to Figure 16-4.Which of the panels shown could illustrate the short-run situation for a monopolistically competitive firm?

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In markets where restrictions on advertising have been used to curtail competition,the U.S.courts have generally

Correct Answer
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In a monopolistically competitive market,

Correct Answer
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Table 16-2 The following table shows the total output produced by the top six firms as well as the total industry output for each industry. -Refer to Table 16-2.What is the concentration ratio for Industry A?

Correct Answer
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A monopolistically competitive market

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Figure 16-8 The figure is drawn for a monopolistically-competitive firm. -Refer to Figure 16-8.In response to the situation represented by the figure,we would expect

Correct Answer
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Critics of markets that are characterized by firms that sell brand name products argue that brand names encourage consumers to pay more for branded products that

Correct Answer
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Correct Answer
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In monopoly markets,price will...
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The market for novels is

Correct Answer
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Monopolistic competition differs from perfect competition because in monopolistically competitive markets

Correct Answer
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In which of the following market structures can firms earn economic profits in the long run?

Correct Answer
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Economists are unanimous in their belief that advertising is socially inefficient.

Correct Answer
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Empirical evidence suggests that advertising usually leads to an increase in the price for advertised products.

Correct Answer
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Monopolistic competition and monopoly are examples of a market structure called imperfect competition.

Correct Answer
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Table 16-6 Traci's Hairstyling is one salon among many in the market for hairstyling.The following table presents cost and revenue data for haircuts at Traci's Hairstyling. -Refer to Table 16-6.At the profit-maximizing quantity,what is Traci's total profit?

Correct Answer
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In the long run,monopolistically competitive firms produce where demand equals average total cost.

Correct Answer
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Exam 16: Monopolistic Competition

When an industry has many firms,the industry is

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Figure 16-2 -Refer to Figure 16-2.If this firm profit-maximizes,how much cost will it incur?

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Since a firm in a monopolistically competitive market faces a

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Figure 16-2 This figure depicts a situation in a monopolistically competitive market. -Refer to Figure 16-2.Which of the following will occur in the long run in this industry?

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Figure 16-4 -Refer to Figure 16-4.Which of the panels shown could illustrate the short-run situation for a monopolistically competitive firm?

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In markets where restrictions on advertising have been used to curtail competition,the U.S.courts have generally

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In a monopolistically competitive market,

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Table 16-2 The following table shows the total output produced by the top six firms as well as the total industry output for each industry. -Refer to Table 16-2.What is the concentration ratio for Industry A?

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A monopolistically competitive market

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Figure 16-8 The figure is drawn for a monopolistically-competitive firm. -Refer to Figure 16-8.In response to the situation represented by the figure,we would expect

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Critics of markets that are characterized by firms that sell brand name products argue that brand names encourage consumers to pay more for branded products that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedIn monopoly markets,price will...View AnswerShow Answer

The market for novels is

Correct AnswerverifiedShow Answer

Monopolistic competition differs from perfect competition because in monopolistically competitive markets

Correct AnswerverifiedShow Answer

In which of the following market structures can firms earn economic profits in the long run?

Correct AnswerverifiedShow Answer

Economists are unanimous in their belief that advertising is socially inefficient.

Correct AnswerverifiedShow Answer

Empirical evidence suggests that advertising usually leads to an increase in the price for advertised products.

Correct AnswerverifiedShow Answer

Monopolistic competition and monopoly are examples of a market structure called imperfect competition.

Correct AnswerverifiedShow Answer

Table 16-6 Traci's Hairstyling is one salon among many in the market for hairstyling.The following table presents cost and revenue data for haircuts at Traci's Hairstyling. -Refer to Table 16-6.At the profit-maximizing quantity,what is Traci's total profit?

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In the long run,monopolistically competitive firms produce where demand equals average total cost.

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In monopoly markets,price will...
View Answer

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