Question 1

Figure 16-13  
-Refer to Figure 16-13. Which letter represents the profit-maximizing price?

Accepted Answer

The answer of Figure 16-13  
-Refer to Figure 16-13....

Question 2

Considering perfect competition, monopolistic competition, and monopoly, which of the market structures results in production of the welfare-maximizing level of output?

Accepted Answer

The answer of Considering perfect competition, monopolistic competition, and monopoly,...

Question 3

Figure 16-4  
-Refer to Figure 16-4. Which of the following will occur in the long run in this industry?

Accepted Answer

A) Firms will exit this industry. 
B) Firms will enter this industry. 
C) This firm will continue to earn positive economic profits. 
D) This firm will incur losses. 
A) Firms will exit this industry. 
B) Firms will enter this industry. 
C) This firm will continue to earn positive economic profits. 
D) This firm will incur losses.

Question 4

Monopolistically competitive markets may be socially inefficient because

Accepted Answer

A) most firms produce inferior products. 
B) government programs cannot effectively regulate price. 
C) firms earn zero economic profit. 
D) the market may have too much or too little entry by new firms. 
A) most firms produce inferior products. 
B) government programs cannot effectively regulate price. 
C) firms earn zero economic profit. 
D) the market may have too much or too little entry by new firms.

Question 5

Table 16-4
This table shows the demand schedule, marginal cost, and average total cost for a monopolistically competitive firm.  
-Refer to Table 16-4. If the government forces this firm to produce at its efficient output level, how much profit will this firm earn?

Accepted Answer

A) a $12 loss 
B) a $13 profit 
C) a $25 profit 
D) a $32 profit 
A) a $12 loss 
B) a $13 profit 
C) a $25 profit 
D) a $32 profit

Question 6

Table 16-7
A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to 20.  
-Refer to Table 16-7. If the firm has a constant marginal cost of $7 per unit, what price should the firm charge to maximize profit?

Accepted Answer

A) $10 
B) $14 
C) $18 
D) $22 
A) $10 
B) $14 
C) $18 
D) $22

Question 7

When consumers are exposed to additional choices that result from the introduction of a new product,

Accepted Answer

A) their satisfaction is likely to be lowered as a result of their having to make additional choices. 
B) a product-variety externality is said to occur. 
C) an advertising externality is said to occur. 
D) consumers are likely to experience negative consumption externalities. 
A) their satisfaction is likely to be lowered as a result of their having to make additional choices. 
B) a product-variety externality is said to occur. 
C) an advertising externality is said to occur. 
D) consumers are likely to experience negative consumption externalities.

Question 8

Of the following market structures, which are considered imperfectly competitive? i.Perfect competition
Ii)Monopoly
IIi)Monopolistic competition
IV)
Oligopoly

Accepted Answer

A) III only 
B) II and III 
C) III and IV 
D) II, III, and IV 
A) III only 
B) II and III 
C) III and IV 
D) II, III, and IV

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

In the short run, a firm operating in a monopolistically competitive market can earn

Accepted Answer

A) positive economic profits. 
B) economic losses. 
C) zero economic profits. 
D) All of the above are possible. 
A) positive economic profits. 
B) economic losses. 
C) zero economic profits. 
D) All of the above are possible.

Question 11

Scenario 16-6
Ike's Ice Cream has decided to open a new ice cream parlor in Mayville, MS. The market for ice cream parlors is monopolistically competitive.
-Refer to Scenario 16-6. As a result of the new Ike's Ice Cream parlor, existing ice cream shops located in Mayville are likely to experience a

Accepted Answer

A) business-stealing externality, which harms producers. 
B) business-stealing externality, which benefits producers. 
C) product-variety externality, which harms consumers. 
D) product-variety externality, which benefits consumers. 
A) business-stealing externality, which harms producers. 
B) business-stealing externality, which benefits producers. 
C) product-variety externality, which harms consumers. 
D) product-variety externality, which benefits consumers.

Question 12

Figure 16-8
The lines in the figures below illustrate the potential effect of entry and exit in a monopolistically competitive market on either the demand curve or the marginal cost curve of existing firms.  
-Refer to Figure 16-8. Panel (d) illustrates the change that would occur if existing firms faced

Accepted Answer

A) long-run economic losses. 
B) a decrease in the diversity of products offered in the market. 
C) new entrants in the market. 
D) firms exiting the market. 
A) long-run economic losses. 
B) a decrease in the diversity of products offered in the market. 
C) new entrants in the market. 
D) firms exiting the market.

Question 13

Figure 16-11  
-Refer to Figure 16-11. The graph depicts a monopolistically competitive firm in the short run. Which of the following explanations best describes the long run adjustment?

Accepted Answer

A) More firms will enter this market and each firm will have a smaller share of the total market demand, shifting this firm's demand curve to the left. 
B) More firms will enter this market and each firm will have a larger share of the total market demand, shifting this firm's demand to the right. 
C) Firms will exit this market and each firm will have a smaller share of the total market demand, shifting this firm's demand to the left. 
D) Firms will exit this market and each firm will have a larger share of the total market demand, shifting this firm's demand to the right. 
A) More firms will enter this market and each firm will have a smaller share of the total market demand, shifting this firm's demand curve to the left. 
B) More firms will enter this market and each firm will have a larger share of the total market demand, shifting this firm's demand to the right. 
C) Firms will exit this market and each firm will have a smaller share of the total market demand, shifting this firm's demand to the left. 
D) Firms will exit this market and each firm will have a larger share of the total market demand, shifting this firm's demand to the right.

Question 14

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 price would a profit-maximizing monopolist charge for the product?

Accepted Answer

A) P = 4 
B) P = 10 
C) P = 12 
D) P = 20 
A) P = 4 
B) P = 10 
C) P = 12 
D) P = 20

Question 15

In some countries, brand name fast-food restaurants are not allowed to operate. Such restrictions are likely to

Accepted Answer

A) enhance the social welfare of society. 
B) increase the number of fast-food restaurants. 
C) reduce barriers to entry in imperfect markets. 
D) reduce the competitive nature of local fast-food markets. 
A) enhance the social welfare of society. 
B) increase the number of fast-food restaurants. 
C) reduce barriers to entry in imperfect markets. 
D) reduce the competitive nature of local fast-food markets.

Question 16

Monopolistic competition is characterized by i)
Efficient scale
Ii)
Markup pricing over marginal cost
Iii)
Deadweight loss
Iv)
Excess capacity

Accepted Answer

A) i) and ii) only 
B) ii) and iv) only 
C) i), ii), and iii) only 
D) ii), iii), and iv) only 
A) i) and ii) only 
B) ii) and iv) only 
C) i), ii), and iii) only 
D) ii), iii), and iv) only

Question 17

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

Accepted Answer

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

Question 18

Figure 16-13  
-Refer to Figure 16-13. Use the letters to identify the area of total revenue for this firm.

Accepted Answer

The answer of Figure 16-13  
-Refer to Figure 16-13....

Question 19

​Deadweight losses are associated with monopolistic competition:

Accepted Answer

A) ​In the short run, but not the long run 
B) ​In the long run, but not the short run 
C) ​In both the short and long run 
D) In neither the short run nor the long run 
A) ​In the short run, but not the long run 
B) ​In the long run, but not the short run 
C) ​In both the short and long run 
D) In neither the short run nor the long run

Question 20

Figure 16-12  
-Refer to Figure 16-12. What, if any, long run adjustment will take place in this industry?

Accepted Answer

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

Figure 16-13 -Refer to Figure 16-13. Which letter represents the profit-maximizing price?

Considering perfect competition, monopolistic competition, and monopoly, which of the market structures results in production of the welfare-maximizing level of output?

Figure 16-4 -Refer to Figure 16-4. Which of the following will occur in the long run in this industry?

Monopolistically competitive markets may be socially inefficient because

Table 16-4 This table shows the demand schedule, marginal cost, and average total cost for a monopolistically competitive firm. -Refer to Table 16-4. If the government forces this firm to produce at its efficient output level, how much profit will this firm earn?

Table 16-7 A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to 20. -Refer to Table 16-7. If the firm has a constant marginal cost of $7 per unit, what price should the firm charge to maximize profit?

When consumers are exposed to additional choices that result from the introduction of a new product,

Of the following market structures, which are considered imperfectly competitive? i.Perfect competition Ii)Monopoly IIi)Monopolistic competition IV) Oligopoly

In the short run, a firm operating in a monopolistically competitive market can earn

Scenario 16-6 Ike's Ice Cream has decided to open a new ice cream parlor in Mayville, MS. The market for ice cream parlors is monopolistically competitive. -Refer to Scenario 16-6. As a result of the new Ike's Ice Cream parlor, existing ice cream shops located in Mayville are likely to experience a

Figure 16-11 -Refer to Figure 16-11. The graph depicts a monopolistically competitive firm in the short run. Which of the following explanations best describes the long run adjustment?

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 price would a profit-maximizing monopolist charge for the product?

In some countries, brand name fast-food restaurants are not allowed to operate. Such restrictions are likely to

Monopolistic competition is characterized by i) Efficient scale Ii) Markup pricing over marginal cost Iii) Deadweight loss Iv) Excess capacity

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

Figure 16-13 -Refer to Figure 16-13. Use the letters to identify the area of total revenue for this firm.

Deadweight losses are associated with monopolistic competition:

Figure 16-12 -Refer to Figure 16-12. What, if any, long run adjustment will take place in this industry?

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 16-13 -Refer to Figure 16-13. Which letter represents the profit-maximizing price?

Considering perfect competition, monopolistic competition, and monopoly, which of the market structures results in production of the welfare-maximizing level of output?

Figure 16-4 -Refer to Figure 16-4. Which of the following will occur in the long run in this industry?

Monopolistically competitive markets may be socially inefficient because

Table 16-4 This table shows the demand schedule, marginal cost, and average total cost for a monopolistically competitive firm. -Refer to Table 16-4. If the government forces this firm to produce at its efficient output level, how much profit will this firm earn?

Table 16-7 A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to 20. -Refer to Table 16-7. If the firm has a constant marginal cost of $7 per unit, what price should the firm charge to maximize profit?

When consumers are exposed to additional choices that result from the introduction of a new product,

Of the following market structures, which are considered imperfectly competitive? i.Perfect competition Ii)Monopoly IIi)Monopolistic competition IV) Oligopoly

In the short run, a firm operating in a monopolistically competitive market can earn

Scenario 16-6 Ike's Ice Cream has decided to open a new ice cream parlor in Mayville, MS. The market for ice cream parlors is monopolistically competitive. -Refer to Scenario 16-6. As a result of the new Ike's Ice Cream parlor, existing ice cream shops located in Mayville are likely to experience a

Figure 16-11 -Refer to Figure 16-11. The graph depicts a monopolistically competitive firm in the short run. Which of the following explanations best describes the long run adjustment?

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 price would a profit-maximizing monopolist charge for the product?

In some countries, brand name fast-food restaurants are not allowed to operate. Such restrictions are likely to

Monopolistic competition is characterized by i) Efficient scale Ii) Markup pricing over marginal cost Iii) Deadweight loss Iv) Excess capacity

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

Figure 16-13 -Refer to Figure 16-13. Use the letters to identify the area of total revenue for this firm.

​Deadweight losses are associated with monopolistic competition:

Figure 16-12 -Refer to Figure 16-12. What, if any, long run adjustment will take place in this industry?

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

Deadweight losses are associated with monopolistic competition: