ECON312

question

A good way to describe ____(monopolistic/oligopolistic) competition is that it mixes a small amount of monopoly power with a large amount of competition, while_______ (monopoly/oligopoly) blends a large amount of monopoly power, a small amount of competition through entry, and considerable rivalry among firms.

answer

Blank 1: monopolistic
Blank 2: oligopoly or oligopolistic

question

Which of the following are typical characteristics of monopolistic competition?

answer

No collusion
Independent action
Small market share

question

Which of the following produce variations of a particular product?

answer

Monopolistically competitive firms

question

Entry of new firms into monopolistically competitive industries is relatively easy because ______.

answer

capital requirements are low

question

A monopolistic competitor's demand curve is ______.

answer

more elastic than that of a pure monopoly but less elastic than that of a firm in pure competition

question

Two types of market models that closely approximate many markets in the real world are

answer

monopolistic competition and oligopoly.

question

In the short run, monopolistically competitive firms maximize profits or minimize losses by producing the output level where

answer

marginal revenue equals marginal cost.

question

Monopolistic competition normally consists of 25 to 75 firms rather than hundreds or thousands and involves which of the following characteristics?

answer

independent action
small market shares
no collusion

question

What will happen to a monopolistically competitive firm in the long run?

answer

It will only break even.

question

Which of the following correctly describes the difference between products under pure competition versus products under monopolistic competition?

answer

Standardized products are sold in pure competition, but differentiated products are sold in monopolistic competition.

question

In the long run, a monopolistic competitor fails to achieve which of the following?

answer

Allocative efficiency
Productive efficiency

question

Entry to and exit from monopolistically competitive industries is ______.

answer

relatively easy

question

When Mary tried to get an appointment with a local dentist she was told that the earliest the doctor could see her was in three weeks. This may have been due to a lack of ______.

answer

excess capacity

question

The demand curve faced by a monopolistically competitive firm is _____.

answer

highly but not perfectly elastic.

question

If a monopolistically competitive firm is producing where its marginal revenue is less than its marginal cost, then the firm

answer

should produce less output to increase profits or reduce losses.

question

Which of the following factors is most likely to help a monopolistically competitive firm postpone earning only a normal profit?

answer

Product differentiation

question

In long-run equilibrium, monopolistically competitive firms will show a(n) _____.

answer

normal profit

question

Which of the following represents the most significant benefits to society generated by monopolistically competitive markets?

answer

Product differentiation

question

Productive efficiency in monopolistically competitive markets does not occur in the long run because firms set the price

answer

on the demand curve where MR=MC to maximize economic profit, making output less than optimal from society's perspective.

question

Monopolistically competitive firms to engage in ______ competition by means of product differentiation and advertising, which makes the market situation complex.

answer

nonprice

question

Which of the following best exemplifies a firm with excess capacity?

answer

A fast-food restaurant where customers never have to wait to place an order.

question

Why do firms engage in product differentiation if it adds to the firm's costs?

answer

Increased differentiation may increase demand enough to compensate for the added costs.

question

A major trade-off that occurs in monopolistically competitive industries is that, as product differentiation increases,

answer

excess capacity also increases.

question

In order for a monopolistically competitive firm to maximize profits, it must juggle which of the following factors?

answer

the selling price of the product
the level of advertising
the variety of product

1 of 24

question

answer

Blank 1: monopolistic
Blank 2: oligopoly or oligopolistic

question

Which of the following are typical characteristics of monopolistic competition?

answer

No collusion
Independent action
Small market share

question

Which of the following produce variations of a particular product?

answer

Monopolistically competitive firms

question

Entry of new firms into monopolistically competitive industries is relatively easy because ______.

answer

capital requirements are low

question

A monopolistic competitor's demand curve is ______.

answer

more elastic than that of a pure monopoly but less elastic than that of a firm in pure competition

question

Two types of market models that closely approximate many markets in the real world are

answer

monopolistic competition and oligopoly.

question

In the short run, monopolistically competitive firms maximize profits or minimize losses by producing the output level where

answer

marginal revenue equals marginal cost.

question

Monopolistic competition normally consists of 25 to 75 firms rather than hundreds or thousands and involves which of the following characteristics?

answer

independent action
small market shares
no collusion

question

What will happen to a monopolistically competitive firm in the long run?

answer

It will only break even.

question

Which of the following correctly describes the difference between products under pure competition versus products under monopolistic competition?

answer

Standardized products are sold in pure competition, but differentiated products are sold in monopolistic competition.

question

In the long run, a monopolistic competitor fails to achieve which of the following?

answer

Allocative efficiency
Productive efficiency

question

Entry to and exit from monopolistically competitive industries is ______.

answer

relatively easy

question

When Mary tried to get an appointment with a local dentist she was told that the earliest the doctor could see her was in three weeks. This may have been due to a lack of ______.

answer

excess capacity

question

The demand curve faced by a monopolistically competitive firm is _____.

answer

highly but not perfectly elastic.

question

If a monopolistically competitive firm is producing where its marginal revenue is less than its marginal cost, then the firm

answer

should produce less output to increase profits or reduce losses.

question

Which of the following factors is most likely to help a monopolistically competitive firm postpone earning only a normal profit?

answer

Product differentiation

question

In long-run equilibrium, monopolistically competitive firms will show a(n) _____.

answer

normal profit

question

Which of the following represents the most significant benefits to society generated by monopolistically competitive markets?

answer

Product differentiation

question

Productive efficiency in monopolistically competitive markets does not occur in the long run because firms set the price

answer

on the demand curve where MR=MC to maximize economic profit, making output less than optimal from society's perspective.

question

Monopolistically competitive firms to engage in ______ competition by means of product differentiation and advertising, which makes the market situation complex.

answer

nonprice

question

Which of the following best exemplifies a firm with excess capacity?

answer

A fast-food restaurant where customers never have to wait to place an order.

question

Why do firms engage in product differentiation if it adds to the firm's costs?

answer

Increased differentiation may increase demand enough to compensate for the added costs.

question

A major trade-off that occurs in monopolistically competitive industries is that, as product differentiation increases,

answer

excess capacity also increases.

question

In order for a monopolistically competitive firm to maximize profits, it must juggle which of the following factors?

answer

the selling price of the product
the level of advertising
the variety of product

Continue to order Get a quote

ECON312

Recent Posts

Recent Comments

Calculate the price of your order

Our guarantees

Money-back guarantee

Zero-plagiarism guarantee

Free-revision policy

Privacy policy

Fair-cooperation guarantee