question
In long-run equilibrium, a monopolistic competitive firm will most likely produce a level of output for which price equals average total cost.
answer
True
question
A monopolistic competitive firm is a price taker, while an oligopolist is a price searcher.
answer
False
question
The profit-maximizing monopolistic competitive firm produces a level of output at which marginal revenue equals marginal cost.
answer
True
question
One of the ways in which some monopolistic competitors try to become more like monopolists is through the use of designer labels.
answer
True
question
One of the assumptions of the theory of monopolistic competition is that all firms in the industry produce and sell a homogenous product.
answer
False
question
One of the key assumptions of the theory of oligopoly is that firms cannot influence the market price.
answer
False
question
In a monopolistic competitive industry,
answer
each firm in the industry produces a slightly differentiated product.
question
In a monopolistic competitive market, which of the following factors probably does not give rise to product differentiation?
answer
the small number of sellers
question
Which of the following industries is the best real-world example of an oligopoly market?
answer
automobiles
question
The monopolistic competitive firm faces a(n) __________ demand curve.
answer
downward-sloping
question
The monopolistic competitive firm faces a __________ demand curve and therefore is a price __________.
answer
downward-sloping; searcher
question
If a monopolistic competitive firm raises its price, then
answer
it should expect to lose some, but not all, of its customers.
question
Generally speaking, monopolistic competitive firms earn zero economic profits in the long-run, but some monopolistic competitive firms may earn positive economic profits if
answer
they have successfully differentiated their products from their competitors' products.
question
In long run equilibrium, the monopolistic competitor will most likely
answer
be earning zero economic profit.
question
The profit-maximizing oligopolist produces where________________________
answer
b and c (marginal revenue equals marginal cost, price is greater than average total cost.)
question
Refer to Exhibit 24-3. Which of the following points represents the profit-maximizing quantity and price of a monopolistic competitor?
answer
A
question
Refer to Exhibit 24-3. For this profit maximizing monopolistic competitor profit is represented by the area
answer
P3P1AC.
question
Refer to Exhibit 24-9. There ___________ barriers to entry in a perfectly competitive market. There ____________ barriers to entry in monopolistic competition. There ____________ barriers to entry in oligopoly. There ____________ barriers to entry in monopoly. [Your answers should fill in blanks (H), (I), (J) and (K), respectively.]
answer
are no; are no; are; are
question
Which of the following market structures is closest to perfect competition?
answer
Monopolistic Competition
question
The market equilibrium price and quantity in a monopolistic competitive market are the same as those in a perfectly competitive market.
answer
False
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