Exam 14: Oligopoly and Monopolistic Competition

The flatter (more relatively elastic)is the residual demand curve is,________.

Which option correctly sorts different market structures in terms of competitiveness,from the most competitive to the least?

Consider the following table.Which option correctly fills the blanks in the table?

The Organization of the Petroleum Exporting Countries (OPEC)is an example of a ________.

The figure below depicts a monopolistically competitive firm in the short run. -Refer to the figure above.In the short run,the profit-maximizing monopolistically competitive firm produces a level of output that results in a deadweight loss equal to ________.

Which of the following will happen if a firm in a duopoly with homogeneous products increases its price above its marginal cost once a Nash equilibrium is reached?

The table below summarizes the information possessed by a firm in a monopolistically competitive market. Quantity demanded is in thousands of units. -Refer to the table above.If this market were perfectly competitive,the long-run equilibrium price would be ________.

Which of the following is a feature of an oligopoly?

Answer: The market for candy bars has excess capacity. This is because firms in a monopolistically competitive market do not produce at the minimum point on their average total cost curve, unlike firms in a perfectly competitive market. The monopolistically competitive firms produce at a level below the efficient scale of production, as can be seen in the following figure. The firm in the figure above does not increase production up to the level associated with the minimum point on the ATC curve, QMᵢn, because it would then need to cut the price it charges for its goods, resulting in lower profits. Firms in a perfectly competitive market charge a price equal to the marginal cost of production and produce at the minimum point on the average total cost curve, as shown in the figure below. -Refer to the figure above.This 's profit maximizing choice happens when it ________.

In which of the following market structures is social surplus maximized?

The following figure depicts four different market situations. -Refer to the figure above.Which of the four market situations depicts a monopolistically competitive firm making positive profits?

In an oligopoly industry with differentiated products,price ________.

Suppose that a firm in a monopolistically competitive market has a constant marginal cost and it is making a positive profit in the short run.What will happen in the long-run equilibrium?

________ are examples of differentiated goods.

A duopoly (two-firm industry)is an example of ________.

The following figure depicts four different market situations. -Refer to the figure above.Which of the four market situations depicts a monopolistically competitive firm in the long run?

For a monopolistically competitive firm,________.

The following figure shows the cost curves (ATC,average total cost; MC,marginal cost)of firm that operates in a monopolistic competition market,as well as the demand (D)facing the firm and its marginal revenue (MR).How much profit does this firm make in the short run?

Under Bertrand competition,________.

The following figure shows the cost curves (ATC, average total cost; MC, marginal cost) of a firm that operates in a monopolistic competition market, as well as the demand (D) facing this firm and its marginal revenue (MR). -Refer to the figure above.What is the profit-maximizing level of output that this firm should supply in the short run?