Exam 9: Monopolistic Competition and Oligopoly

Explain how collusion makes firms better off.Given the incentives to collude,briefly explain why every industry does not become a cartel. __________________________________________________________________________________________________________________________________________________________________________________________

If a monopolistically competitive firm breaks even,the firm ________.

One of the assumptions of monopolistic competition is that firms produce differentiated products.What does this assumption imply about the demand curve facing a representative firm? __________________________________________________________________________________________________________________________________________________________________________________________

Economists have long debated whether there is a significant loss of well-being to society in markets that are monopolistically competitive rather than perfectly competitive.Which of the following offers the best reason why some economists believe that monopolistically competitive markets are less efficient than perfectly competitive markets?

Suppose two firms in a duopoly implicitly collude and charge a high price.How might each firm benefit from advertising that it will match the lowest price offered by its competitor?

What must be true for allocative efficiency to hold?

A monopolistically competitive firm that is profitable in the short run will face competition that will eventually eliminate the firm's profits in the long run.But the firm can stave off competition and continue to earn economic profits if ________.

Sony,Microsoft,and Nintendo have in common that _____________.

A reason why there is more competition among restaurants than among large discount department stores is that restaurants(,)________.

How is an oligopoly firm similar to a monopolistic competitor?

Tony's Italian Ice is a monopolistically competitive firm.If Tony's earns a profit in the short run,which of the following is most likely to occur?

A monopolistically competitive firm maximises profit where _____.

If firms are protected by substantial barriers to entry,short-run profits can turn into long-run profits.

An entry barrier exists when firms in an industry charge the lowest price possible for their products.

Figure 9.18 -Refer to Figure 9.18.The diagram demonstrates that ___________.

Figure 9.12 -Refer to Figure 9.12.The monopolistic competitor's profit-maximising price is ______.

Unlike a perfectly competitive firm,for a monopolistically competitive firm _______.

A monopolistically competitive firm earning profits in the short run will find the demand for its product decreasing and becoming more elastic in the long run as new firms move into the industry until _______.

The most important barrier to entry is economies of scale.

Figure 9.12 -Refer to Figure 9.12.The monopolistic competitor's profit-maximising output is _______.