question
sellers selling similar but differentiated products.
answer
The key characteristics of a monopolistically competitive market structure include
question
have some control over its price because its product is differentiated.
answer
A monopolistically competitive firm will
question
monopolistically competitive
answer
In San Francisco there are many restaurants that specialize in a wide variety of cuisines. Patronage at these restaurants is influenced by factors such as tastes, price and location. This market is
question
False
answer
Monopolistically competitive firms face a perfectly elastic demand curve.
True or False
{Hint: it faces a highly but not perfectly elastic demand curve}
True or False
{Hint: it faces a highly but not perfectly elastic demand curve}
question
True
answer
Firms in monopolistic competition compete by selling similar, but not identical products.
True or False
True or False
question
experience the entry of new rival firms into the industry in the long run.
answer
A monopolistically competitive industry that earns economic profits in the short run will
question
very difficult
answer
The financial situation at Starbucks in the late 2000s illustrates the fact that maintaining long-run profits in a monopolistically competitive market is
question
No, because it does not produce at minimum average total cost.
answer
Is a monopolistically competitive firm productively efficient?
question
No, because price is greater than marginal cost.
answer
Is a monopolistically competitive firm allocatively efficient?
question
True
answer
Advertisements and experiments with the product varieties are essential parts of monopolistic competition.
True or False
True or False
question
True
answer
firms earn only normal profit in the long run
True or False
True or False
question
C) firms pursuing aggressive business strategies, independent of rivals' strategies.
answer
An oligopolistic industry is characterized by all of the following except
A) existence of entry barriers.
B) the possibility of reaping long run economic profits.
C) firms pursuing aggressive business strategies, independent of rivals' strategies.
D) production of standardized products.
[Hint: the decisions are mutually interdependent to those of the rivals]
A) existence of entry barriers.
B) the possibility of reaping long run economic profits.
C) firms pursuing aggressive business strategies, independent of rivals' strategies.
D) production of standardized products.
[Hint: the decisions are mutually interdependent to those of the rivals]
question
the pharmaceutical industry
answer
Which of the following is the best example of an oligopolistic industry?
question
the fraction of an industry's sales accounted for by the four largest firms.
answer
A four-firm concentration ratio measures
question
True
answer
The share of four largest firms needs to be above 40% of the total market share by all firms for the market to be considered oligopolistic.
True or False
True or False
question
True
answer
Unlike monopolistic competition, firms under oligopoly can keep profit in the long run.
True or False
True or False
question
True
answer
Oligopoly is neither productively, nor allocatively efficient.
True or False
True or False
question
True
answer
Game theoretic models are used to describe profit maximization under different oligopoly situations.
True or False
True or False
question
True
answer
Oligolists produce either same (like oil companies) or differentiated (some pharmaceuticals) products.
True or False
True or False
question
True
answer
Traditionally oligopoly characterizes collusion among large firms to gain more market power.
True or False
True or False
question
monopolistic competition
answer
a market structure in which barriers to entry are low and many firms compete by selling similar, but not identical, products.
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