Question 1

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

Accepted Answer

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

Question 2

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 3

Figure 16-9
The figure is drawn for a monopolistically-competitive firm.  
-Refer to Figure 16-9. The quantity of output at which the MC and ATC curves cross is the

Accepted Answer

A) efficient scale of the firm. 
B) short-run equilibrium quantity of output for the firm. 
C) long-run equilibrium quantity of output for the firm. 
D) All of the above are correct. 
A) efficient scale of the firm. 
B) short-run equilibrium quantity of output for the firm. 
C) long-run equilibrium quantity of output for the firm. 
D) All of the above are correct.

Question 4

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 5

​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 6

​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 7

Which of the following statements is not correct?

Accepted Answer

A) Critics of advertising argue that firms advertise to manipulate consumers' tastes. 
B) Defenders of advertising argue that advertising provides valuable product information to consumers. 
C) An industry with many brand name products will be more competitive than one with many generic products. 
D) The willingness of a firm to spend a large amount of money on advertising can signal the quality of the product. 
A) Critics of advertising argue that firms advertise to manipulate consumers' tastes. 
B) Defenders of advertising argue that advertising provides valuable product information to consumers. 
C) An industry with many brand name products will be more competitive than one with many generic products. 
D) The willingness of a firm to spend a large amount of money on advertising can signal the quality of the product.

Question 8

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. What is the maximum amount of profit that Peter can earn per day?

Accepted Answer

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

Question 9

In monopolistically competitive markets, economic losses

Accepted Answer

A) suggest that some existing firms will exit the market. 
B) suggest that new firms will enter the market. 
C) are minimized through government-imposed barriers to entry. 
D) are never possible. 
A) suggest that some existing firms will exit the market. 
B) suggest that new firms will enter the market. 
C) are minimized through government-imposed barriers to entry. 
D) are never possible.

Question 10

Figure 16-13  
-Refer to Figure 16-13. Use the letters to identify the deadweight loss associated with this firm's profit-maximizing production.

Accepted Answer

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

Question 11

Figure 16-7  
-Refer to Figure 16-7. The firm depicted in panel b faces a horizontal demand curve. If panel b depicts a profit-maximizing firm,

Accepted Answer

A) it could be operating in either a perfectly competitive market or in a monopolistically competitive market. 
B) it would not have excess capacity in its production as long as it is earning zero economic profit. 
C) it is able to choose the price at which it sells its product. 
D) the firm can always raise its profit by increasing production since consumers will buy as much as the firm can produce. 
A) it could be operating in either a perfectly competitive market or in a monopolistically competitive market. 
B) it would not have excess capacity in its production as long as it is earning zero economic profit. 
C) it is able to choose the price at which it sells its product. 
D) the firm can always raise its profit by increasing production since consumers will buy as much as the firm can produce.

Question 12

A concentration ratio

Accepted Answer

A) measures the percentage of total sales of the top firm in the industry. 
B) reflects the level of competition in an industry. 
C) is inversely related to the price charged by the top firm in the industry. 
D) All of the above are correct. 
A) measures the percentage of total sales of the top firm in the industry. 
B) reflects the level of competition in an industry. 
C) is inversely related to the price charged by the top firm in the industry. 
D) All of the above are correct.

Question 13

In a monopolistically competitive market,

Accepted Answer

A) the entry of new firms creates externalities. 
B) the absence of restrictions on entry by new firms ensures that there will be no deadweight loss. 
C) there are always too many firms in the market relative to the socially-optimal number of firms. 
D) firms cannot earn positive economic profits in the short run. 
A) the entry of new firms creates externalities. 
B) the absence of restrictions on entry by new firms ensures that there will be no deadweight loss. 
C) there are always too many firms in the market relative to the socially-optimal number of firms. 
D) firms cannot earn positive economic profits in the short run.

Question 14

In a market that is characterized by imperfect competition,

Accepted Answer

A) firms are price takers. 
B) there are always a large number of firms. 
C) there are at least a few firms that compete with one another. 
D) the actions of one firm in the market never have any impact on the other firms' profits. 
A) firms are price takers. 
B) there are always a large number of firms. 
C) there are at least a few firms that compete with one another. 
D) the actions of one firm in the market never have any impact on the other firms' profits.

Question 15

Discuss how brand names may enhance the efficiency of markets in a less developed country.

Accepted Answer

Recognizable brand names signal quality

Question 16

Each firm in a monopolistically competitive market

Accepted Answer

A) earns both short-run and long-run profits. 
B) faces a downward-sloping demand curve. 
C) cannot earn economic profit in the short run. 
D) sets price equal to marginal cost. 
A) earns both short-run and long-run profits. 
B) faces a downward-sloping demand curve. 
C) cannot earn economic profit in the short run. 
D) sets price equal to marginal cost.

Question 17

Figure 16-4  
-Refer to Figure 16-4. At the profit-maximizing, or loss-minimizing, output level, how many units of output will the firm in this figure produce?

Accepted Answer

A) 20 
B) 30 
C) 40 
D) This firm will choose not to produce. 
A) 20 
B) 30 
C) 40 
D) This firm will choose not to produce.

Question 18

One theory of advertising suggests that

Accepted Answer

A) advertising is more effective for industrial products than consumer products. 
B) the content of advertising may be irrelevant to product success in the market. 
C) regulations limiting advertising benefit consumers, but not producers. 
D) television advertising is more effective in reducing competition than ads on websites. 
A) advertising is more effective for industrial products than consumer products. 
B) the content of advertising may be irrelevant to product success in the market. 
C) regulations limiting advertising benefit consumers, but not producers. 
D) television advertising is more effective in reducing competition than ads on websites.

Question 19

When monopolistically competitive firms advertise, in the long run

Accepted Answer

A) they will still earn zero economic profit. 
B) they can earn positive economic profit by increasing market share. 
C) the market price must fall. 
D) the market price must rise. 
A) they will still earn zero economic profit. 
B) they can earn positive economic profit by increasing market share. 
C) the market price must fall. 
D) the market price must rise.

Question 20

When a monopolistically competitive firm raises its price,

Accepted Answer

A) quantity demanded falls to zero. 
B) quantity demanded declines but not to zero. 
C) the market supply curve shifts outward. 
D) quantity demanded remains constant. 
A) quantity demanded falls to zero. 
B) quantity demanded declines but not to zero. 
C) the market supply curve shifts outward. 
D) quantity demanded remains constant.

Exam 16: Monopolistic Competition

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

Figure 16-9 The figure is drawn for a monopolistically-competitive firm. -Refer to Figure 16-9. The quantity of output at which the MC and ATC curves cross is the

Edward Chamberlin argued that governments should

​Deadweight losses are associated with monopolistic competition:

​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:

Which of the following statements is not correct?

In monopolistically competitive markets, economic losses

Figure 16-13 -Refer to Figure 16-13. Use the letters to identify the deadweight loss associated with this firm's profit-maximizing production.

Figure 16-7 -Refer to Figure 16-7. The firm depicted in panel b faces a horizontal demand curve. If panel b depicts a profit-maximizing firm,

A concentration ratio

In a monopolistically competitive market,

In a market that is characterized by imperfect competition,

Discuss how brand names may enhance the efficiency of markets in a less developed country.

Each firm in a monopolistically competitive market

Figure 16-4 -Refer to Figure 16-4. At the profit-maximizing, or loss-minimizing, output level, how many units of output will the firm in this figure produce?

One theory of advertising suggests that

When monopolistically competitive firms advertise, in the long run

When a monopolistically competitive firm raises its price,

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

Applications: 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

Measuring a Nation S Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

Deadweight losses are associated with monopolistic competition:

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: