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monopolistic competition
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an industry with a large number of firms, differentiated products, and free entry and exit is called
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monopolistic competition
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large number of firms compete; each firm produces a differentiated product; firms are free to enter and exit
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downward sloping demand curve
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what does monopolistic competition have in common with monopoly
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can, cannot
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a firm in monopolistic competition _______ influence its price and _______ influence the market average price
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price, quantity it can sell
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as a firm in monopolistic competition sets the price for its product, the firm faces a tradeoff between
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small, can
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a firm in monopolistic competition has a ______ market share and ______influence the price of its good or service
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below demand curve
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the marginal revenue curve facing a monopolistically competitive firm lies where
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mr=mc, demand curve
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a firm in monopolistic competition makes its decision on quantity and price by producing where _______ and setting the price for this quantity from the _______-
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mr is less than 3.56
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if a monopolistically competitive sellers marginal cost is $3.56, the firm will decrease its output if
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can enter
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if a firm in monopolistic competition is earning an economic profit, other firms
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no; zero
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in monopolistic competition, there are ______ barriers to entry, so therefore in the long run, economic profit equals ______
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shifts leftward
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when a monopolistically competitive firms demand curve shifts leftward, what happens to its marginal revenue curve
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exit, increase
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when firms in monopolistic comp incur an economic loss, some firms will ______ the industry, and demand will _______ for the firms that remain
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price, average total cost, minimum
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in the long run, a firm in monopolistic competition will produce where ______equals ___________ and ATC is not at its
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price, average total cost
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in the long run, a firm in monopolistic competition will produce so that its _______ equals ________
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less than
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in the long run, firms in monopolistic competition produce at a level that is _______ the efficient scale of output
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less than, minimizes average total cost
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excess capacity exists when a firm produces __________ the quantity that _________
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inefficient, marginal cost
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a firm in monopolistic competition is ______ because price exceeds _______
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average total cost, minimum
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a monopolistically competitive firm is inefficient because the firm produces at an output level where ______ is not at its ______
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product differentiation
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one of the major benefits to society of monopolistic competition is
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