Question 1

Product differentiation involves making a product that is

Accepted Answer

A) slightly different from the products of competing firms. 
B) no different than the products of competing firms. 
C) very different from the products of competing firms. 
D) completely different from the products of competing firms. 
E) cheaper than the products of competing firms. 
A) slightly different from the products of competing firms. 
B) no different than the products of competing firms. 
C) very different from the products of competing firms. 
D) completely different from the products of competing firms. 
E) cheaper than the products of competing firms.

Question 2

The firm illustrated above is

Accepted Answer

A) earning an economic profit of $400,000 per month. 
B) earning an economic profit of $2,000,000 per month. 
C) earning an economic profit of $1,600,000 per month. 
D) incurring an economic loss of $400,000 per month. 
E) incurring an economic loss of $1,600,000 per month. 
A) earning an economic profit of $400,000 per month. 
B) earning an economic profit of $2,000,000 per month. 
C) earning an economic profit of $1,600,000 per month. 
D) incurring an economic loss of $400,000 per month. 
E) incurring an economic loss of $1,600,000 per month.

Question 3

$$\begin{array} { c c } 
\begin{array} { c } 
\text { Price } \
\text { (dollars per unit) }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { demanded } \
\text { (units) }
\end{array} \
\hline 26 & 0 \
24 & 1 \
22 & 2 \
20 & 3 \
18 & 4 \
16 & 5 \
14 & 6 \
12 & 7 \
10 & 8
\end{array}$$ 
 $$\begin{array}{l}
\text { Quantity Average total }\
\begin{array} { c c c } 
\begin{array} { c } 
\text { produced } \
\text { (units) }
\end{array} & \begin{array} { c } 
\text { cost } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Marginal cost } \
\text { (dollars) }
\end{array} \
\hline 0 & - - & - - \
1 & 18.00 & 8.00 \
2 & 12.00 & 6.00 \
3 & 10.66 & 8.00 \
4 & 10.50 & 10.00 \
5 & 11.20 & 14.00 \
6 & 12.66 & 20.00 \
7 & 15.14 & 30.00 \
8 & 23.25 & 80.00 \
\hline
\end{array}
\end{array}$$
-The demand and cost schedules for a firm in monopolistic competition are in the above tables. What is the profit-maximizing level of output and price?
 What amount of profit is the firm earning?
 Is this firm in a short-run or long-run equilibrium?
 Why?

Accepted Answer

To determine the quantity produced, the

Question 4

Because economic profits are eliminated in the long run in monopolistic competition, to earn an economic profit firms continuously

Accepted Answer

A) shut down. 
B) exit the industry. 
C) innovate and develop new products. 
D) declare bankruptcy. 
E) decrease their costs by decreasing their selling costs. 
A) shut down. 
B) exit the industry. 
C) innovate and develop new products. 
D) declare bankruptcy. 
E) decrease their costs by decreasing their selling costs.

Question 5

A Nash equilibrium occurs when each player in a game takes the ________ given the action of the other player.

Accepted Answer

A) worst possible action for himself or herself 
B) best possible action for himself or herself 
C) most unpredictable possible action 
D) most mutually beneficial possible action 
E) best possible action for the other player 
A) worst possible action for himself or herself 
B) best possible action for himself or herself 
C) most unpredictable possible action 
D) most mutually beneficial possible action 
E) best possible action for the other player

Question 6

-The above figure shows a restaurant engaged in monopolistic competition with other restaurants. The equilibrium quantity at this restaurant is ________ meals per day.

Accepted Answer

A) less than 150 
B) between 151 and 250 
C) between 251 and 350 
D) between 451 and 450 
E) more than 451 
A) less than 150 
B) between 151 and 250 
C) between 251 and 350 
D) between 451 and 450 
E) more than 451

Question 7

-The above figure definitely shows

Accepted Answer

A) a long-run equilibrium for a monopolistically competitive firm. 
B) an industry with few firms. 
C) a long-run equilibrium for a perfectly competitive firm. 
D) a long-run equilibrium for a perfectly competitive market. 
E) a short-run equilibrium for a monopoly. 
A) a long-run equilibrium for a monopolistically competitive firm. 
B) an industry with few firms. 
C) a long-run equilibrium for a perfectly competitive firm. 
D) a long-run equilibrium for a perfectly competitive market. 
E) a short-run equilibrium for a monopoly.

Question 8

A cartel is a collusive agreement among a number of firms that is designed to

Accepted Answer

A) expand output and lower prices but not to a predatory level. 
B) restrict output and lower prices to a predatory level. 
C) restrict output and raise prices. 
D) expand output and raise prices. 
E) expand output and lower prices to a predatory level. 
A) expand output and lower prices but not to a predatory level. 
B) restrict output and lower prices to a predatory level. 
C) restrict output and raise prices. 
D) expand output and raise prices. 
E) expand output and lower prices to a predatory level.

Question 9

What type of profit can a firm in monopolistic competition earn in the long run?
 Explain your answer.

Accepted Answer

In the long run, a firm in monopolistic

Question 10

Explain how selling costs in monopolistic competition affect the efficiency of monopolistic competition.

Accepted Answer

The additional selling costs from produc

Question 11

Firms in monopolistic competition determine the profit-maximizing level of output by producing

Accepted Answer

A) the same output level as rivals do. 
B) where average total cost is minimized. 
C) at the point of minimum average fixed cost. 
D) where marginal revenue equals marginal cost. 
E) where price equals average total cost. 
A) the same output level as rivals do. 
B) where average total cost is minimized. 
C) at the point of minimum average fixed cost. 
D) where marginal revenue equals marginal cost. 
E) where price equals average total cost.

Question 12

-Intel and AMD are a duopoly that produce CPU chips. Intel and AMD can conduct R&D or they can not conduct R&D. The table above shows the payoff matrix for the two firms. If AMD is playing a tit-for-tat strategy, then if Intel conducted R&D last period, AMD

Accepted Answer

A) definitely conducts R&D this period. 
B) definitely does not conduct R&D this period. 
C) might conduct R&D or might not conduct R&D, depending on Intel's profit. 
D) might conduct R&D or might not conduct R&D, depending on its profit. 
E) might conduct R&D or might not conduct R&D, but more information is needed to determine its action. 
A) definitely conducts R&D this period. 
B) definitely does not conduct R&D this period. 
C) might conduct R&D or might not conduct R&D, depending on Intel's profit. 
D) might conduct R&D or might not conduct R&D, depending on its profit. 
E) might conduct R&D or might not conduct R&D, but more information is needed to determine its action.

Question 13

A firm in monopolistic competition maximizes profit by producing the quantity at which

Accepted Answer

A) marginal revenue equals marginal cost. 
B) price equals marginal revenue. 
C) price equals marginal cost. 
D) demand equals marginal cost. 
E) price equals average total cost. 
A) marginal revenue equals marginal cost. 
B) price equals marginal revenue. 
C) price equals marginal cost. 
D) demand equals marginal cost. 
E) price equals average total cost.

Question 14

In monopolistic competition, a firm can set the price for its product because of

Accepted Answer

A) easy entry and exit. 
B) economic profits. 
C) product differentiation. 
D) many competitors. 
E) the firm's upward sloping demand curve. 
A) easy entry and exit. 
B) economic profits. 
C) product differentiation. 
D) many competitors. 
E) the firm's upward sloping demand curve.

Question 15

What is the best outcome for society: When firms in an oligopoly operate as a monopoly or when they act as perfect competitors?
 Briefly explain your answer.

Accepted Answer

The best outcome for society is when the

Question 16

The marginal revenue curve facing a monopolistically competitive firm

Accepted Answer

A) lies on its demand curve. 
B) lies above its demand curve. 
C) lies below its demand curve. 
D) is equal to its price curve. 
E) is parallel to its demand curve. 
A) lies on its demand curve. 
B) lies above its demand curve. 
C) lies below its demand curve. 
D) is equal to its price curve. 
E) is parallel to its demand curve.

Product differentiation involves making a product that is

The firm illustrated above is

Because economic profits are eliminated in the long run in monopolistic competition, to earn an economic profit firms continuously

A Nash equilibrium occurs when each player in a game takes the ________ given the action of the other player.

-The above figure shows a restaurant engaged in monopolistic competition with other restaurants. The equilibrium quantity at this restaurant is ________ meals per day.

-The above figure definitely shows

A cartel is a collusive agreement among a number of firms that is designed to

What type of profit can a firm in monopolistic competition earn in the long run? Explain your answer.

Explain how selling costs in monopolistic competition affect the efficiency of monopolistic competition.

Firms in monopolistic competition determine the profit-maximizing level of output by producing

-Intel and AMD are a duopoly that produce CPU chips. Intel and AMD can conduct R&D or they can not conduct R&D. The table above shows the payoff matrix for the two firms. If AMD is playing a tit-for-tat strategy, then if Intel conducted R&D last period, AMD

A firm in monopolistic competition maximizes profit by producing the quantity at which

In monopolistic competition, a firm can set the price for its product because of

What is the best outcome for society: When firms in an oligopoly operate as a monopoly or when they act as perfect competitors? Briefly explain your answer.

The marginal revenue curve facing a monopolistically competitive firm

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 13: Monopolistic Competition and Oligopoly

Product differentiation involves making a product that is

The firm illustrated above is

Because economic profits are eliminated in the long run in monopolistic competition, to earn an economic profit firms continuously

A Nash equilibrium occurs when each player in a game takes the ________ given the action of the other player.

-The above figure shows a restaurant engaged in monopolistic competition with other restaurants. The equilibrium quantity at this restaurant is ________ meals per day.

-The above figure definitely shows

A cartel is a collusive agreement among a number of firms that is designed to

What type of profit can a firm in monopolistic competition earn in the long run? Explain your answer.

Explain how selling costs in monopolistic competition affect the efficiency of monopolistic competition.

Firms in monopolistic competition determine the profit-maximizing level of output by producing

-Intel and AMD are a duopoly that produce CPU chips. Intel and AMD can conduct R&D or they can not conduct R&D. The table above shows the payoff matrix for the two firms. If AMD is playing a tit-for-tat strategy, then if Intel conducted R&D last period, AMD

A firm in monopolistic competition maximizes profit by producing the quantity at which

In monopolistic competition, a firm can set the price for its product because of

What is the best outcome for society: When firms in an oligopoly operate as a monopoly or when they act as perfect competitors? Briefly explain your answer.

The marginal revenue curve facing a monopolistically competitive firm

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters