FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 16: Monopolistic Competition

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 171

Multiple Choice

Review LaterAdd Note

Review Later

Excess capacity is

A) an example of the inefficiencies of monopolistically competitive markets.
B) a short-run problem but not a long-run problem.
C) a characteristic of rising average total cost curves.
D) Both a and b are correct.

E) B) and C)
F) All of the above

Correct Answer

verified

Show Answer

Question 172

Multiple Choice

Review LaterAdd Note

Review Later

A monopolistically competitive firm

A) has the usual deadweight loss of monopoly pricing.
B) experiences a zero profit in a long-run equilibrium.
C) is said to have excess capacity.
D) All of the above are correct.

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

Correct Answer

verified

Show Answer

Question 173

Multiple Choice

Review LaterAdd Note

For a profit-maximizing monopolistically competitive firm, price exceeds marginal cost in

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

When a new firm enters a monopolistically competitive market, the individual demand curves faced by all existing firms in that market will

The claim that advertising reduces the elasticity of demand is likely to be made by a defender of advertising.

Scenario 16-3 Peter operates an ice cream shop in the center of Fairfield. He sells several unusual flavors of organic, homemade ice cream so he has a monopoly over his own ice cream, though he competes with many other firms selling ice cream in Fairfield for the same customers. Peter's demand and cost values for sales per day are given in the table below. (Everyone who purchases Peter's ice cream buys a double scoop cone because it's so delicious.) -Refer to Scenario 16-3. When Peter maximizes his profits, how much revenue does he earn per day?

In the short run, a firm operating in a monopolistically competitive market

Among the following situations, which one is least likely to apply to a monopolistically competitive firm?

Which of the following markets impose deadweight losses on society? (i) Perfect competition (ii) Monopolistic competition (iii) Monopoly

The two types of imperfectly competitive markets are

Figure 16-3 This figure depicts a situation in a monopolistically competitive market. -Refer to Figure 16-3. How much profit will the monopolistically competitive firm earn in this situation?

In the short run, a firm in a monopolistically competitive market operates much like a

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

Considering perfect competition, monopolistic competition, and monopoly, which of the market structures features entry in the long run?

A monopolistically competitive market

Scenario 16-8 Burger Bonanza, a major national burger chain, recently decided to spend $4 million on an advertising campaign featuring a world famous actor to promote its new Bomber Burger. -Refer to Scenario 16-8. What two benefits are conveyed by the brand name Burger Bonanza?

Table 16-7 A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to 20. -Refer to Table 16-7. When this firm profit maximizes and faces a constant marginal cost of $7, what is the amount of its markup over marginal cost?

Product differentiation causes the seller of a good to face what type of demand curve?

Figure 16-12 -Refer to Figure 16-12. Does this monopolistically competitive market produce the welfare-maximizing level of output?