Chapter 17 MicroEconomics - Assignment Essays %

Q: Differences that monoco possesses

Excess capacity & A markup of price over marginal cost

Q: Excess Quantity

if the quantity it produces is less that the quantity at which average total cost is a minimum.

Q: Efficient Scale

the quantity of production at which average total cost is a minimum.

Q: Markup

the amount by which price exceeds marginal cost.

Q: Because price exceeds marginal cost

monopolistic competition creates deadweight loss—an indicator of inefficiency.

question

Monopolistic Competition

answer

where a large number of firms compete and are free to enter or exit

question

Product Differentiation

answer

making a product that is slightly different from the products of competing firms

question

Monopolistic Competition... barriers to entry?

answer

There are NONE...so no long term economic profit

question

Four-firm Concentration Ratio

answer

is the percentage of the value of sales accounted for by the four largest firms in the industry.

question

HHI

answer

is the square of the percentage market share of each firm summed over the largest 50 firms in a market.
(<1000 is competitive and 1000 to 1800 is moderately competitive)

question

With MonoCo, entry

answer

reduces demand

question

With MonoCo, D and ATC intersection

answer

is profit-maximizing point

question

Differences that monoco possesses

answer

Excess capacity & A markup of price over marginal cost

question

Excess Quantity

answer

if the quantity it produces is less that the quantity at which average total cost is a minimum.

question

Efficient Scale

answer

the quantity of production at which average total cost is a minimum.

question

Markup

answer

the amount by which price exceeds marginal cost.

question

Because price exceeds marginal cost

answer

monopolistic competition creates deadweight loss—an indicator of inefficiency.

question

Advertising done by ALL firms

answer

might decrease the demand for any one firm's product and might make demand more elastic.

question

With advertising,

answer

average total cost increases.

question

When do firms produce variety?

answer

when the marginal cost of doing so is less than the marginal benefit.

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question

Monopolistic Competition

answer

where a large number of firms compete and are free to enter or exit

question

Product Differentiation

answer

making a product that is slightly different from the products of competing firms

question

Monopolistic Competition... barriers to entry?

answer

There are NONE...so no long term economic profit

question

Four-firm Concentration Ratio

answer

is the percentage of the value of sales accounted for by the four largest firms in the industry.

question

HHI

answer

is the square of the percentage market share of each firm summed over the largest 50 firms in a market.
(<1000 is competitive and 1000 to 1800 is moderately competitive)

question

With MonoCo, entry

answer

reduces demand

question

With MonoCo, D and ATC intersection

answer

is profit-maximizing point

question

Differences that monoco possesses

answer

Excess capacity & A markup of price over marginal cost

question

Excess Quantity

answer

if the quantity it produces is less that the quantity at which average total cost is a minimum.

question

Efficient Scale

answer

the quantity of production at which average total cost is a minimum.

question

Markup

answer

the amount by which price exceeds marginal cost.

question

Because price exceeds marginal cost

answer

monopolistic competition creates deadweight loss—an indicator of inefficiency.

question

Advertising done by ALL firms

answer

might decrease the demand for any one firm's product and might make demand more elastic.

question

With advertising,

answer

average total cost increases.

question

When do firms produce variety?

answer

when the marginal cost of doing so is less than the marginal benefit.

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