Question 1

Monopolistic competitors in the food industry will often include a recyclable symbol on packaging used for their product as a means to

Accepted Answer

A)  be socially responsible. 
B)  be environmentally responsible. 
C)  differentiate their product. 
D)  be perceived more favorably. 
A)  be socially responsible. 
B)  be environmentally responsible. 
C)  differentiate their product. 
D)  be perceived more favorably.

Question 2

The desire of businesses to _______, so that they can raise the prices that they charge and earn higher profits, has been well-understood by economists for a long time.

Accepted Answer

A)  compete with each other 
B)  engage in free market activities 
C)  maximize profits for social benefit 
D)  avoid competing with each other 
A)  compete with each other 
B)  engage in free market activities 
C)  maximize profits for social benefit 
D)  avoid competing with each other

Question 3

If a perfectly competitive firm raises its price, the quantity demanded of its product _______.

Accepted Answer

A)  diminishes temporarily in the short run 
B)  falls to zero 
C)  stays the same 
D)  falls below marginal cost 
A)  diminishes temporarily in the short run 
B)  falls to zero 
C)  stays the same 
D)  falls below marginal cost

Question 4

The perceived demand curve for a group of competing oligopoly firms will appear kinked as a result of their commitment to

Accepted Answer

A)  match price increases, but not price cuts. 
B)  stand at opposite ends of the competition spectrum. 
C)  match price cuts, but not price increases. 
D)  stand at the high point of the competition spectrum. 
A)  match price increases, but not price cuts. 
B)  stand at opposite ends of the competition spectrum. 
C)  match price cuts, but not price increases. 
D)  stand at the high point of the competition spectrum.

Question 5

Why are the underlying economic meanings of the perceived demand curves for a monopolist and monopolistic competitor different?

Accepted Answer

A)  a monopolist faces the market demand curve and a monopolist competitor does not 
B)  a monopolist competitor faces the market demand curve and a monopolist does not 
C)  because the demand curve for a monopolistic competitor is upward sloping 
D)  because the demand curve perceived by the monopolist is flatter than that of a monopolist competitor 
A)  a monopolist faces the market demand curve and a monopolist competitor does not 
B)  a monopolist competitor faces the market demand curve and a monopolist does not 
C)  because the demand curve for a monopolistic competitor is upward sloping 
D)  because the demand curve perceived by the monopolist is flatter than that of a monopolist competitor

Question 6

If the firm is producing at a quantity of output where marginal revenue exceeds marginal cost, then,

Accepted Answer

A)  the firm's perceived demand will shift to the left. 
B)  the firm should keep expanding production. 
C)  each marginal unit adds profit by bringing in less revenue than its cost. 
D)  the firm is now earning zero for profit. 
A)  the firm's perceived demand will shift to the left. 
B)  the firm should keep expanding production. 
C)  each marginal unit adds profit by bringing in less revenue than its cost. 
D)  the firm is now earning zero for profit.

Question 7

Perfect competition and monopoly stand at _______ of the spectrum of competition.

Accepted Answer

A)  opposite ends 
B)  the high end 
C)  the low end 
D)  the mid-way point 
A)  opposite ends 
B)  the high end 
C)  the low end 
D)  the mid-way point

Question 8

If a monopoly or a monopolistic competitor raises their prices, then

Accepted Answer

A)  decline in quantity demanded will be larger for the monopoly. 
B)  decline in quantity demanded will be larger for the monopolistic competitor. 
C)  the quantity demanded for the monopoly product falls to zero. 
D)  the quantity demanded for the monopolistic competitor will fall to zero. 
A)  decline in quantity demanded will be larger for the monopoly. 
B)  decline in quantity demanded will be larger for the monopolistic competitor. 
C)  the quantity demanded for the monopoly product falls to zero. 
D)  the quantity demanded for the monopolistic competitor will fall to zero.

Question 9

Product differentiation may occur in _______ because _______ created strong preferences for certain brands.

Accepted Answer

A)  shaping intangible preferences; predatory pricing 
B)  the minds of buyers; past habits and advertising 
C)  imperfect competition; the concept of differentiated products 
D)  imperfect competition; advertising and consumer habits 
A)  shaping intangible preferences; predatory pricing 
B)  the minds of buyers; past habits and advertising 
C)  imperfect competition; the concept of differentiated products 
D)  imperfect competition; advertising and consumer habits

Question 10

If a perfectly competitive market involves many firms selling identical products, then, in the face of such competition,

Accepted Answer

A)  each of these firms must act as a price-maker. 
B)  each of these firms must act as a price-taker. 
C)  collusion amongst them will most often result. 
D)  demand curves can become kinked in appearance. 
A)  each of these firms must act as a price-maker. 
B)  each of these firms must act as a price-taker. 
C)  collusion amongst them will most often result. 
D)  demand curves can become kinked in appearance.

Question 11

The branch of mathematics that analyzes situations in which players must make decisions and then receive payoffs most often used by economists is

Accepted Answer

A)  oligopoly collusion. 
B)  prisoner's dilemma. 
C)  game theory. 
D)  collusion theory 
A)  oligopoly collusion. 
B)  prisoner's dilemma. 
C)  game theory. 
D)  collusion theory

Question 12

A monopolistic competitor has the following information about cost and demand.

What will the firm's profits equal in the short run?

Accepted Answer

A)  0 
B)  $91 
C)  $102 
D)  $228 
A)  0 
B)  $91 
C)  $102 
D)  $228

Question 13

A monopolistically competitive industry does not display _______ in either the short-run, when firms are making _______, nor in the long-run, when firms are earning _______.

Accepted Answer

A)  allocative efficiency; profits and losses; negative profits 
B)  productive efficiency; profits and losses; zero profits 
C)  productive and allocative efficiency; profits and losses; zero profits 
D)  productive and allocative efficiency; profits and losses; negative profits 
A)  allocative efficiency; profits and losses; negative profits 
B)  productive efficiency; profits and losses; zero profits 
C)  productive and allocative efficiency; profits and losses; zero profits 
D)  productive and allocative efficiency; profits and losses; negative profits

Question 14

A monopolistic competitor has the following information about cost and demand.
 
If this industry was perfectly competitive, what price would the good sell for?

Accepted Answer

A)  $8 
B)  $9 
C)  $10 
D)  $11 
A)  $8 
B)  $9 
C)  $10 
D)  $11

Question 15

Would raising the price for a product create a larger decline in quantity demanded for a monopolistic competitor's than it would for a monopoly?

Accepted Answer

A)  no; a monopolistic competitor perceives demand as a price maker 
B)  no; conditions of imperfect competition means demand is constant 
C)  yes; but temporarily because price increases only create a short-run decline 
D)  yes; consumers will buy from competitors offering lower priced substitutes 
A)  no; a monopolistic competitor perceives demand as a price maker 
B)  no; conditions of imperfect competition means demand is constant 
C)  yes; but temporarily because price increases only create a short-run decline 
D)  yes; consumers will buy from competitors offering lower priced substitutes

Question 16

A _______ refers to a group of firms colluding with one another to produce at the monopoly output and sell at the monopoly price.

Accepted Answer

A)  prisoner's dilemma 
B)  cartel 
C)  game theory 
D)  duopoly 
A)  prisoner's dilemma 
B)  cartel 
C)  game theory 
D)  duopoly

Question 17

When P > MC in a monopolistically competitive market, that industry will most likely produce _______ than would be found in a perfectly competitive industry.
Benefits to society of providing additional quantity as measured by the price that people are willing to pay exceeds the marginal costs to society of producing those units.

Accepted Answer

A)  a higher quantity of a good and charge a lower price 
B)  the price that people are willing to pay is lower 
C)  a lower quantity of a good and charge a higher price 
D)  the price people are willing to pay is not more 
A)  a higher quantity of a good and charge a lower price 
B)  the price that people are willing to pay is lower 
C)  a lower quantity of a good and charge a higher price 
D)  the price people are willing to pay is not more

Question 18

In the framework of monopolistic competition, the way advertising works can be perceived as

Accepted Answer

A)  causing a firm's perceived demand curve to become more elastic. 
B)  causing a firm's perceived demand curve to become more inelastic. 
C)  causing demand for the firm's product to increase. 
D)  causing both b and c to occur. 
A)  causing a firm's perceived demand curve to become more elastic. 
B)  causing a firm's perceived demand curve to become more inelastic. 
C)  causing demand for the firm's product to increase. 
D)  causing both b and c to occur.

Question 19

The shape of the perceived demand curve for a perfectly competitive firm reflects that firm's ability to

Accepted Answer

A)  sell any quantity it wishes at the prevailing market price. 
B)  raise its price without losing all of its customers. 
C)  choose any combination of price and quantity. 
D)  lose fewer customers than a monopoly that raised its prices. 
A)  sell any quantity it wishes at the prevailing market price. 
B)  raise its price without losing all of its customers. 
C)  choose any combination of price and quantity. 
D)  lose fewer customers than a monopoly that raised its prices.

Question 20

The long-term result of entry and exit in a perfectly competitive market is that all firms end up selling at the price level determined by the lowest point on the

Accepted Answer

A)  total cost curve. 
B)  average variable cost curve. 
C)  total marginal cost curve 
D)  average cost curve. 
A)  total cost curve. 
B)  average variable cost curve. 
C)  total marginal cost curve 
D)  average cost curve.

Monopolistic competitors in the food industry will often include a recyclable symbol on packaging used for their product as a means to

The desire of businesses to _______, so that they can raise the prices that they charge and earn higher profits, has been well-understood by economists for a long time.

If a perfectly competitive firm raises its price, the quantity demanded of its product _______.

The perceived demand curve for a group of competing oligopoly firms will appear kinked as a result of their commitment to

Why are the underlying economic meanings of the perceived demand curves for a monopolist and monopolistic competitor different?

If the firm is producing at a quantity of output where marginal revenue exceeds marginal cost, then,

Perfect competition and monopoly stand at _______ of the spectrum of competition.

If a monopoly or a monopolistic competitor raises their prices, then

Product differentiation may occur in _ because _ created strong preferences for certain brands.

If a perfectly competitive market involves many firms selling identical products, then, in the face of such competition,

The branch of mathematics that analyzes situations in which players must make decisions and then receive payoffs most often used by economists is

A monopolistic competitor has the following information about cost and demand. What will the firm's profits equal in the short run?

A monopolistically competitive industry does not display ___ in either the short-run, when firms are making _, nor in the long-run, when firms are earning _____.

A monopolistic competitor has the following information about cost and demand. If this industry was perfectly competitive, what price would the good sell for?

Would raising the price for a product create a larger decline in quantity demanded for a monopolistic competitor's than it would for a monopoly?

A _______ refers to a group of firms colluding with one another to produce at the monopoly output and sell at the monopoly price.

In the framework of monopolistic competition, the way advertising works can be perceived as

The shape of the perceived demand curve for a perfectly competitive firm reflects that firm's ability to

The long-term result of entry and exit in a perfectly competitive market is that all firms end up selling at the price level determined by the lowest point on the

Welcome to Economics

Choice in a World of Scarcity

Demand and Supply

Labor and Financial Markets

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Consumer Choices

Cost and Industry Structure

Perfect Competition

Monopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

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Exam 10: Monopolistic Competition and Oligopoly

Monopolistic competitors in the food industry will often include a recyclable symbol on packaging used for their product as a means to

The desire of businesses to _______, so that they can raise the prices that they charge and earn higher profits, has been well-understood by economists for a long time.

If a perfectly competitive firm raises its price, the quantity demanded of its product _______.

The perceived demand curve for a group of competing oligopoly firms will appear kinked as a result of their commitment to

Why are the underlying economic meanings of the perceived demand curves for a monopolist and monopolistic competitor different?

If the firm is producing at a quantity of output where marginal revenue exceeds marginal cost, then,

Perfect competition and monopoly stand at _______ of the spectrum of competition.

If a monopoly or a monopolistic competitor raises their prices, then

Product differentiation may occur in _______ because _______ created strong preferences for certain brands.

If a perfectly competitive market involves many firms selling identical products, then, in the face of such competition,

The branch of mathematics that analyzes situations in which players must make decisions and then receive payoffs most often used by economists is

A monopolistic competitor has the following information about cost and demand. What will the firm's profits equal in the short run?

A monopolistically competitive industry does not display _______ in either the short-run, when firms are making _______, nor in the long-run, when firms are earning _______.

A monopolistic competitor has the following information about cost and demand. If this industry was perfectly competitive, what price would the good sell for?

Would raising the price for a product create a larger decline in quantity demanded for a monopolistic competitor's than it would for a monopoly?

A _______ refers to a group of firms colluding with one another to produce at the monopoly output and sell at the monopoly price.

In the framework of monopolistic competition, the way advertising works can be perceived as

The shape of the perceived demand curve for a perfectly competitive firm reflects that firm's ability to

The long-term result of entry and exit in a perfectly competitive market is that all firms end up selling at the price level determined by the lowest point on the

Welcome to Economics

Choice in a World of Scarcity

Demand and Supply

Labor and Financial Markets

Elasticity

Consumer Choices

Cost and Industry Structure

Perfect Competition

Monopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Poverty and Economic Inequality

Issues in Labor Markets: Unions, Discrimination, Immigration

Information, Risk, and Insurance

Financial Markets

Public Economy

International Trade

Globalization and Protectionism

Filters

Product differentiation may occur in _ because _ created strong preferences for certain brands.

A monopolistically competitive industry does not display ___ in either the short-run, when firms are making _, nor in the long-run, when firms are earning _____.