Question 1

Figure 16-11  
-Refer to Figure 16-11. If this firm profit-maximizes, how much cost will it incur?

Accepted Answer

The answer of Figure 16-11  
-Refer to Figure 16-11....

Question 2

​A monopolistically competitive firm is currently charging a price of $10 and producing 12,000 units/month. It faces monthly fixed costs of $15,000 and has an average variable cost of $6/unit. In the long run, we would expect:

Accepted Answer

A) ​The firm to go out of business 
B) ​The price will rise and output will fall 
C) ​The price will fall and output will fall 
D) ​The price will fall and output will rise 
A) ​The firm to go out of business 
B) ​The price will rise and output will fall 
C) ​The price will fall and output will fall 
D) ​The price will fall and output will rise

Question 3

The general term for market structures that fall somewhere between monopoly and perfect competition is

Accepted Answer

A) incomplete markets. 
B) imperfectly competitive markets. 
C) oligopoly markets. 
D) monopolistically competitive markets. 
A) incomplete markets. 
B) imperfectly competitive markets. 
C) oligopoly markets. 
D) monopolistically competitive markets.

Question 4

Figure 16-12  
-Refer to Figure 16-12. How much excess capacity does this firm have?

Accepted Answer

The answer of Figure 16-12  
-Refer to Figure 16-12....

Question 5

The administrative burden of regulating price in a monopolistically competitive market is

Accepted Answer

A) small due to economies of scale. 
B) large because price is usually below marginal cost. 
C) large because of the large number of firms that produce differentiated products. 
D) small because firms produce with excess capacity. 
A) small due to economies of scale. 
B) large because price is usually below marginal cost. 
C) large because of the large number of firms that produce differentiated products. 
D) small because firms produce with excess capacity.

Question 6

Figure 16-12  
-Refer to Figure 16-12. Compare the price and marginal cost in this market with price and marginal cost if this were a perfectly competitive market.

Accepted Answer

Monopolistic competi

Question 7

Which of the following statements is not correct?

Accepted Answer

A) Monopolistic competition is different from monopoly because monopolistic competition is characterized by free entry, whereas monopoly is characterized by barriers to entry. 
B) Both monopolistic competition and oligopoly fall in between the more extreme market structures of competition and monopoly. 
C) Monopolistic competition is different from oligopoly because each seller in monopolistic competition is small relative to the market, whereas each seller can affect the actions of other sellers in an oligopoly. 
D) Both monopolistic competition and perfect competition are characterized by product differentiation. 
A) Monopolistic competition is different from monopoly because monopolistic competition is characterized by free entry, whereas monopoly is characterized by barriers to entry. 
B) Both monopolistic competition and oligopoly fall in between the more extreme market structures of competition and monopoly. 
C) Monopolistic competition is different from oligopoly because each seller in monopolistic competition is small relative to the market, whereas each seller can affect the actions of other sellers in an oligopoly. 
D) Both monopolistic competition and perfect competition are characterized by product differentiation.

Question 8

Table 16-2
The following table shows the total output produced by the top six firms as well as the total industry output for each industry.  
-Refer to Table 16-2. Which industry has the highest concentration ratio?

Accepted Answer

A) Industry J 
B) Industry K 
C) Industry L 
D) Industry M 
A) Industry J 
B) Industry K 
C) Industry L 
D) Industry M

Question 9

Scenario 16-9
Dean goes to the grocery store to buy chips and soda for a party. He purchases brand name products even though generic versions are available at lower prices. His friend John says he was irrational to spend more for a nearly identical product. His friend Martina agreed with Dean's decision to spend more for the brand name products.
-Refer to Scenario 16-9. If Dean bought the brand name because of advertising he saw for the product, a defender of advertising would say

Accepted Answer

the advertising conv

Question 10

Edward Chamberlin argued that governments should

Accepted Answer

A) ban the use of brand names. 
B) not enforce the trademarks that companies use to identify their products. 
C) vigorously enforce the trademarks that companies use to identify their products. 
D) tax companies whose products have brand names in proportion to how much consumers recognize their products. 
A) ban the use of brand names. 
B) not enforce the trademarks that companies use to identify their products. 
C) vigorously enforce the trademarks that companies use to identify their products. 
D) tax companies whose products have brand names in proportion to how much consumers recognize their products.

Question 11

A downward-sloping demand curve

Accepted Answer

A) is a feature of all monopolistically competitive firms. 
B) means that the firm in question will never experience a zero profit. 
C) causes marginal revenue to exceed price. 
D) prohibits firms from earning positive economic profits in the long run. 
A) is a feature of all monopolistically competitive firms. 
B) means that the firm in question will never experience a zero profit. 
C) causes marginal revenue to exceed price. 
D) prohibits firms from earning positive economic profits in the long run.

Question 12

Which of the following is not an example of Joel Waldfogel's "Tyranny of the Market"?

Accepted Answer

A) A daily newspaper tailored to appeal to the majority of readers in an area. 
B) Nike creating specialized shoes for American Indians' wider feet. 
C) Pharmaceutical companies spending research and development funds on drugs for common diseases. 
D) Airlines offering daily direct flights from one large city to another. 
A) A daily newspaper tailored to appeal to the majority of readers in an area. 
B) Nike creating specialized shoes for American Indians' wider feet. 
C) Pharmaceutical companies spending research and development funds on drugs for common diseases. 
D) Airlines offering daily direct flights from one large city to another.

Question 13

The government may not be able to improve the inefficiencies of a monopolistically competitive market.

Accepted Answer

A) True 
 B)False

Question 14

The typical firm in the US economy

Accepted Answer

A) has some degree of market power. 
B) sells its product for a price that is equal to the marginal cost of producing the last unit. 
C) is perfectly competitive. 
D) is a monopoly. 
A) has some degree of market power. 
B) sells its product for a price that is equal to the marginal cost of producing the last unit. 
C) is perfectly competitive. 
D) is a monopoly.

Question 15

Suppose there is a market in which the firms hold the following market shares: 25%, 20%, 18%, 15%, 8%, 7%, 4%, 2%, 1%. What is the concentration ratio for this market?

Accepted Answer

The answer of Suppose there is a market in which...

Question 16

If "too much choice" is a problem for consumers, it would occur in which market structure(s)?

Accepted Answer

A) perfect competition 
B) monopoly 
C) monopolistic competition 
D) perfect competition and monopolistic competition 
A) perfect competition 
B) monopoly 
C) monopolistic competition 
D) perfect competition and monopolistic competition

Question 17

Scenario 16-3
Peter operates an ice cream shop in the center of Fairfield. He sells several unusual flavors of organic, homemade ice cream so he has a monopoly over his own ice cream, though he competes with many other firms selling ice cream in Fairfield for the same customers. Peter's demand and cost values for sales per day are given in the table below. (Everyone who purchases Peter's ice cream buys a double scoop cone because it's so delicious.)  
-Refer to Scenario 16-3. When Peter maximizes his profits, how much revenue does he earn per day?

Accepted Answer

The answer of Scenario 16-3
Peter operates an ice cream shop...

Question 18

Figure 16-9
The figure is drawn for a monopolistically-competitive firm.  
-Refer to Figure 16-9. Given this firm's cost curves, if the firm were perfectly competitive rather than monopolistically competitive, then in a long-run equilibrium it would produce

Accepted Answer

A) less than 100 units of output. 
B) between 100 and 133.33 units of output. 
C) 133.33 units of output. 
D) more than 133.33 units of output. 
A) less than 100 units of output. 
B) between 100 and 133.33 units of output. 
C) 133.33 units of output. 
D) more than 133.33 units of output.

Question 19

Scenario 16-2
Suppose market demand for a product is given by the equation P = 20 - Q. For this market demand curve, marginal revenue is MR = 20 - 2Q.
-Refer to Scenario 16-2. If the marginal cost of producing this good is 4, what quantity would a profit-maximizing monopolist produce?

Accepted Answer

A) Q = 2 
B) Q = 4 
C) Q = 6 
D) Q = 8 
A) Q = 2 
B) Q = 4 
C) Q = 6 
D) Q = 8

Question 20

Table 16-6
Beatrice's Birthday Cakes is one bakery among many in the market for birthday cakes. The following table presents cost and revenue data for birthday cakes at Beatrice's.  
-Refer to Table 16-6. If the government required Beatrice's to produce at the efficient scale of output, how many cakes would Beatrice's sell?

Accepted Answer

A) 4 
B) 5 
C) 6 
D) 7 
A) 4 
B) 5 
C) 6 
D) 7

Figure 16-11 -Refer to Figure 16-11. If this firm profit-maximizes, how much cost will it incur?

A monopolistically competitive firm is currently charging a price of $10 and producing 12,000 units/month. It faces monthly fixed costs of $15,000 and has an average variable cost of $6/unit. In the long run, we would expect:

The general term for market structures that fall somewhere between monopoly and perfect competition is

Figure 16-12 -Refer to Figure 16-12. How much excess capacity does this firm have?

The administrative burden of regulating price in a monopolistically competitive market is

Figure 16-12 -Refer to Figure 16-12. Compare the price and marginal cost in this market with price and marginal cost if this were a perfectly competitive market.

Which of the following statements is not correct?

Table 16-2 The following table shows the total output produced by the top six firms as well as the total industry output for each industry. -Refer to Table 16-2. Which industry has the highest concentration ratio?

Edward Chamberlin argued that governments should

A downward-sloping demand curve

Which of the following is not an example of Joel Waldfogel's "Tyranny of the Market"?

The government may not be able to improve the inefficiencies of a monopolistically competitive market.

The typical firm in the US economy

Suppose there is a market in which the firms hold the following market shares: 25%, 20%, 18%, 15%, 8%, 7%, 4%, 2%, 1%. What is the concentration ratio for this market?

If "too much choice" is a problem for consumers, it would occur in which market structure(s)?

Figure 16-9 The figure is drawn for a monopolistically-competitive firm. -Refer to Figure 16-9. Given this firm's cost curves, if the firm were perfectly competitive rather than monopolistically competitive, then in a long-run equilibrium it would produce

Scenario 16-2 Suppose market demand for a product is given by the equation P = 20 - Q. For this market demand curve, marginal revenue is MR = 20 - 2Q. -Refer to Scenario 16-2. If the marginal cost of producing this good is 4, what quantity would a profit-maximizing monopolist produce?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Filters

Exam 16: Monopolistic Competition

Figure 16-11 -Refer to Figure 16-11. If this firm profit-maximizes, how much cost will it incur?

​A monopolistically competitive firm is currently charging a price of $10 and producing 12,000 units/month. It faces monthly fixed costs of $15,000 and has an average variable cost of $6/unit. In the long run, we would expect:

The general term for market structures that fall somewhere between monopoly and perfect competition is

Figure 16-12 -Refer to Figure 16-12. How much excess capacity does this firm have?

The administrative burden of regulating price in a monopolistically competitive market is

Figure 16-12 -Refer to Figure 16-12. Compare the price and marginal cost in this market with price and marginal cost if this were a perfectly competitive market.

Which of the following statements is not correct?

Table 16-2 The following table shows the total output produced by the top six firms as well as the total industry output for each industry. -Refer to Table 16-2. Which industry has the highest concentration ratio?

Edward Chamberlin argued that governments should

A downward-sloping demand curve

Which of the following is not an example of Joel Waldfogel's "Tyranny of the Market"?

The government may not be able to improve the inefficiencies of a monopolistically competitive market.

The typical firm in the US economy

Suppose there is a market in which the firms hold the following market shares: 25%, 20%, 18%, 15%, 8%, 7%, 4%, 2%, 1%. What is the concentration ratio for this market?

If "too much choice" is a problem for consumers, it would occur in which market structure(s)?

Figure 16-9 The figure is drawn for a monopolistically-competitive firm. -Refer to Figure 16-9. Given this firm's cost curves, if the firm were perfectly competitive rather than monopolistically competitive, then in a long-run equilibrium it would produce

Scenario 16-2 Suppose market demand for a product is given by the equation P = 20 - Q. For this market demand curve, marginal revenue is MR = 20 - 2Q. -Refer to Scenario 16-2. If the marginal cost of producing this good is 4, what quantity would a profit-maximizing monopolist produce?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Filters

A monopolistically competitive firm is currently charging a price of $10 and producing 12,000 units/month. It faces monthly fixed costs of $15,000 and has an average variable cost of $6/unit. In the long run, we would expect: