Question 1

Which of the following would be classified as a differentiated product produced by a monopolistic competitor?

Accepted Answer

A)  natural gas 
B)  Channel No. 5 
C)  electricity 
D)  tap water 
A)  natural gas 
B)  Channel No. 5 
C)  electricity 
D)  tap water

Question 2

The first step to be undertaken by a profit-maximizing monopolistic competitor wanting to decide what price to charge is to

Accepted Answer

A)  determine total revenue, total cost, and profit 
B)  select the profit maximizing quantity to produce 
C)  determine what price to charge for the product 
D)  determine average costs, total revenue, and profit 
A)  determine total revenue, total cost, and profit 
B)  select the profit maximizing quantity to produce 
C)  determine what price to charge for the product 
D)  determine average costs, total revenue, and profit

Question 3

Joe owns a restaurant. Many of the restaurants that he competes with recently closed, shifting his perceived demand curve. The following 2 tables show his old and new perceived demand curves.

Assume that Joe can only choose from the quantities of output given in the table. By how much does the price that he charges change after the restaurants leave the market?

Accepted Answer

A)  increase by 3 
B)  decrease by 3 
C)  increase by 4 
D)  decrease by 4 
A)  increase by 3 
B)  decrease by 3 
C)  increase by 4 
D)  decrease by 4

Question 4

When entry occurs in a monopolistically competitive industry,

Accepted Answer

A)  marginal costs to society exceed the price people are willing to pay. 
B)  price is equal to marginal revenue gained by society. 
C)  the marginal revenue curve will shift to the left. 
D)  a smaller quantity will be demanded at any given price. 
A)  marginal costs to society exceed the price people are willing to pay. 
B)  price is equal to marginal revenue gained by society. 
C)  the marginal revenue curve will shift to the left. 
D)  a smaller quantity will be demanded at any given price.

Question 5

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

Then, in the long run equilibrium, the firm will sell this good at what price?

Accepted Answer

A)  $5 
B)  $7 
C)  $10 
D)  $14 
A)  $5 
B)  $7 
C)  $10 
D)  $14

Question 6

Briefly explain what quantity a profit-maximizing monopolistic competitor will seek, as well as why or why not this type of competitive firm is productively efficient.

Accepted Answer

A profit-maximizing monopolistic competi

Question 7

The perceived demand for a monopolistic competitor

Accepted Answer

A)  is steep. 
B)  is flat. 
C)  takes competitors into account. 
D)  disregards competitors. 
A)  is steep. 
B)  is flat. 
C)  takes competitors into account. 
D)  disregards competitors.

Question 8

When exit occurs in a monopolistically competitive industry the

Accepted Answer

A)  perceived demand and marginal revenue curves will shift to the right. 
B)  perceived demand and marginal revenue curves will shift to the left. 
C)  perceived demand curve will shift to the left. 
D)  marginal revenue curve will shift to the left. 
A)  perceived demand and marginal revenue curves will shift to the right. 
B)  perceived demand and marginal revenue curves will shift to the left. 
C)  perceived demand curve will shift to the left. 
D)  marginal revenue curve will shift to the left.

Question 9

The following table shows the demand curve and cost information for a firm that is a monopoly.
 
If they maximize their profits, what will their revenue equal?

Accepted Answer

A)  $16,000 
B)  $32,000 
C)  $54,000 
D)  $56,000 
A)  $16,000 
B)  $32,000 
C)  $54,000 
D)  $56,000

Question 10

List at least five examples of some intangible aspects that differentiate products.

Accepted Answer

Some intangible aspects may be 1) promis

Question 11

Briefly compare and contrast the perceived demand curve for a monopolistically competitive firm and a perfectly competitive firm.

Accepted Answer

The perceived demand curve for a monopol

Question 12

In the framework of monopolistic competition, advertising works because it causes

Accepted Answer

A)  the steeper perceived demand curve to become flatter. 
B)  perceived demand curve to shift to the left. 
C)  perceived demand curve to shift to the right. 
D)  a steeper perceived demand curve, as well as c above. 
A)  the steeper perceived demand curve to become flatter. 
B)  perceived demand curve to shift to the left. 
C)  perceived demand curve to shift to the right. 
D)  a steeper perceived demand curve, as well as c above.

Question 13

Briefly compare and contrast the perceived demand curve for a monopolistic competitor and a monopolist.

Accepted Answer

The perceived demand curve for a monopol

Question 14

In the framework of an oligopoly, what strategy can work like a silent form of cooperation?

Accepted Answer

A)  always match other cartel firms' price cuts, but don't match price increases 
B)  always match other cartel firms' price increases, but don't match price cuts 
C)  immediately match price increases 
D)  legally enforceable agreements 
A)  always match other cartel firms' price cuts, but don't match price increases 
B)  always match other cartel firms' price increases, but don't match price cuts 
C)  immediately match price increases 
D)  legally enforceable agreements

Question 15

A monopolistically competitive firm may earn abnormally high profits in the

Accepted Answer

A)  short term, but the process of entry will drive those profits to zero in the long run. 
B)  long term, but the process of entry will drive those profits to zero in the short run. 
C)  short run, but after entry occurs, the long term perceived demand curve shifts to the right. 
D)  long run, but after entry occurs, the short term perceived demand curve shifts to the right. 
A)  short term, but the process of entry will drive those profits to zero in the long run. 
B)  long term, but the process of entry will drive those profits to zero in the short run. 
C)  short run, but after entry occurs, the long term perceived demand curve shifts to the right. 
D)  long run, but after entry occurs, the short term perceived demand curve shifts to the right.

Question 16

Briefly describe what an oligopoly is, as well as the circumstances that could allow oligopolists to earn their highest profits.

Accepted Answer

An oligopoly is a situation where a few

Question 17

A successful advertising campaign may allow competing monopolists to

Accepted Answer

A)  sell a greater quantity. 
B)  charge a higher price. 
C)  increase its profits. 
D)  do all of the above. 
A)  sell a greater quantity. 
B)  charge a higher price. 
C)  increase its profits. 
D)  do all of the above.

Question 18

Briefly contrast the level that a monopolistically competitive firm will tend to produce at and the price it will charge with that of a perfectly competitive firm.

Accepted Answer

A monopolistically competitiv

Question 19

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

Accepted Answer

A)  -$55 
B)  $0 
C)  $250 
D)  $280 
A)  -$55 
B)  $0 
C)  $250 
D)  $280

Which of the following would be classified as a differentiated product produced by a monopolistic competitor?

The first step to be undertaken by a profit-maximizing monopolistic competitor wanting to decide what price to charge is to

When entry occurs in a monopolistically competitive industry,

A monopolistic competitor has the following information about cost and demand. Then, in the long run equilibrium, the firm will sell this good at what price?

Briefly explain what quantity a profit-maximizing monopolistic competitor will seek, as well as why or why not this type of competitive firm is productively efficient.

The perceived demand for a monopolistic competitor

When exit occurs in a monopolistically competitive industry the

The following table shows the demand curve and cost information for a firm that is a monopoly. If they maximize their profits, what will their revenue equal?

List at least five examples of some intangible aspects that differentiate products.

Briefly compare and contrast the perceived demand curve for a monopolistically competitive firm and a perfectly competitive firm.

In the framework of monopolistic competition, advertising works because it causes

Briefly compare and contrast the perceived demand curve for a monopolistic competitor and a monopolist.

In the framework of an oligopoly, what strategy can work like a silent form of cooperation?

A monopolistically competitive firm may earn abnormally high profits in the

Briefly describe what an oligopoly is, as well as the circumstances that could allow oligopolists to earn their highest profits.

A successful advertising campaign may allow competing monopolists to

Briefly contrast the level that a monopolistically competitive firm will tend to produce at and the price it will charge with that of a perfectly competitive firm.

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

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

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Exam 10: Monopolistic Competition and Oligopoly

Which of the following would be classified as a differentiated product produced by a monopolistic competitor?

The first step to be undertaken by a profit-maximizing monopolistic competitor wanting to decide what price to charge is to

When entry occurs in a monopolistically competitive industry,

A monopolistic competitor has the following information about cost and demand. Then, in the long run equilibrium, the firm will sell this good at what price?

Briefly explain what quantity a profit-maximizing monopolistic competitor will seek, as well as why or why not this type of competitive firm is productively efficient.

The perceived demand for a monopolistic competitor

When exit occurs in a monopolistically competitive industry the

The following table shows the demand curve and cost information for a firm that is a monopoly. If they maximize their profits, what will their revenue equal?

List at least five examples of some intangible aspects that differentiate products.

Briefly compare and contrast the perceived demand curve for a monopolistically competitive firm and a perfectly competitive firm.

In the framework of monopolistic competition, advertising works because it causes

Briefly compare and contrast the perceived demand curve for a monopolistic competitor and a monopolist.

In the framework of an oligopoly, what strategy can work like a silent form of cooperation?

A monopolistically competitive firm may earn abnormally high profits in the

Briefly describe what an oligopoly is, as well as the circumstances that could allow oligopolists to earn their highest profits.

A successful advertising campaign may allow competing monopolists to

Briefly contrast the level that a monopolistically competitive firm will tend to produce at and the price it will charge with that of a perfectly competitive firm.

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

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