Exam 11: Imperfect Competition

Below is a graphical illustration of a typical firm operating in a monopolistically competitive industry: -Refer to the graph above to answer this question.At what price and quantity,respectively,would this firm sell its product in order to maximize profits?

Monopolistically-competitive firms typically make economic profits in the long run.

Below is a graphical illustration of a typical firm operating in a monopolistically competitive industry: -Refer to the graph above to answer this question.What area graphically represents a profit-maximizing firm's total profits or loss?

All of the following,except one,could be used to support the position that advertising is wasteful?

In which of the following market structures is entry easiest?

What is the term for a market structure in which there are many firms who sell a differentiated product and have some control over the price of the products they sell?

Which of the following characteristics most distinguishes an oligopoly industry from the other three types of market structures?

All of the following,except one,are benefits of product differentiation.Which is the exception?

In what type of market does the gumnut industry operate?

What measures the percentage of an industry's total sales that is controlled by the few largest firms?

All,except one,of the following statements are valid arguments in favour of advertising.Which one is the exception?

-Refer to the graph above to answer this question.According to what assumption is the demand curve drawn?

"The loss of profits resulting from higher production costs is often less than the loss of profits that would occur from raising prices to try to recoup those costs" Why might this be so?

All of the following,except one,could be a barrier to entry into an oligopoly industry.Which is the exception?

"In an oligopoly and monopolistically competitive market structure,firms act independently of each other." Evaluate this statement.

Which of the following statements best describes the significance of the kink in the demand curve under this variant of oligopoly theory?

The home appliance,automotive,brewing and computer hardware industries are all examples of what kind of industry structure?

What does product differentiation mean?

All of the following statements,except one,are valid statements regarding barriers to entry and the existence of large profits in an oligopoly industry.Which statement is not valid?

-Refer to the graph above to answer this question.What is the firm's profit-maximizing output?