question
In the competitive market for figure skate blades, manufacturers offer an array of products that are
answer
distinctly different in a particular way.
question
The first step to be undertaken by a profit-maximizing monopolistic competitor wanting to decide what price to charge is to
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select the profit maximizing quantity to produce
question
Total Cost can be expressed as:
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(implicit cost + explicit cost)
(average cost x quantity)
(average cost x quantity)
question
Given the level of demand below, what is the marginal revenue of the fifth unit of production?
answer
$0
question
The sales of firms within a monopolistically competitive industry can depend upon:
answer
price.
advertising for substitute products.
intangibles like warrantees or return policies.
advertising for substitute products.
intangibles like warrantees or return policies.
question
In the framework of monopolistic competition, advertising works because it causes:
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a steeper perceived demand curve.
question
Given the level of demand in the graph below, if Q = 10, total revenue =
answer
50
question
Assuming that the monopolistic competitor faces the demand and costs depicted below and finds the profit maximizing level of output, what will be the firm's total cost?
answer
$128
question
Firm X competes in a monopolistically competitive market. Suddenly, new firms enter the market, causing X's perceived demand curve to shift. The following tables show X's original and new demand curves and X's cost information. If X can only choose from the quantities of output given in the table, by how much will the quantity that it produces change after the new firms enter the market?
answer
the profit-maximizing quantity of output will fall by 10 units
question
Given the level of demand below, what is the marginal revenue of the fourth unit of production?
answer
$6
question
If the firm is producing at a quantity of output where marginal cost exceeds marginal revenue, then ________.
answer
the firm should reduce production
each marginal unit adds profit by bringing in more revenue than its cost
each marginal unit adds profit by bringing in more revenue than its cost
question
Given the level of demand below, what is the marginal revenue of the third unit of production?
answer
$10
question
A successful advertising campaign results in ________.
answer
the firm's perceived demand curve to become more inelastic, so demand increases
question
In the framework of monopolistic competition, the way advertising works can be perceived as:
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causing a firm's perceived demand curve to become more inelastic.
question
Assuming that the monopolistic competitor faces the demand and costs depicted below and finds the profit maximizing level of output, what will be the firm's profit?
answer
$48
question
Monopolistic competition is different from perfect competition in that, in the long-run:
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the characteristics of items sold will be more dynamic within monopolistic competition.
question
If each of two competing monopolists undertakes equally successful advertising efforts to attract consumers away from the other, the total result is ________.
answer
they will simply neutralize one another's efforts
question
Shopping malls typically lease retail space to a large number of clothing stores. When this group of retailers competes to sell similar but not identical products, they engage in what economists call ________.
answer
monopolistic competition
question
In the short-run, the firm will operate (not shut down) as long as revenue is more than enough to cover:
answer
variable costs
question
Suppose the monopolistic competitor faces costs and demand as depicted in the table below. Given the goal of maximizing profit, what level of output would the firm choose?
answer
3
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