Exam 9: Monopolistic Competition and Oligopoly

Most economists are concerned about entry barriers.Why is this so important to them? __________________________________________________________________________________________________________________________________________________________________________________________

The characteristic below that is common to monopolistic competition and perfect competition is _____.

Collusion makes firms better off because if they act as a single entity (a cartel),they can reduce output and increase their prices and profits.But some cartels have failed and others are unstable.Which of the following is a reason why cartels often break down?

Economists believe that consumers would be better off if markets were perfectly competitive rather than monopolistically competitive.

Figure 9.5 -Refer to Figure 9.5.The chocolate store represented in the diagram is currently selling Q_a units of candy at a price of P_a.Is this candy store maximising its profit and if it is not,what would you recommend to the firm?

A monopolistically competitive market is described as one in which there are _____.

Which of the following is not an example of a monopolistically competitive market?

What is meant by 'excess capacity'? How does it relate to consumer utility? __________________________________________________________________________________________________________________________________________________________________________________________

Table 9.1 Quantity Price Total Revenue (dollars) (dollars) 1 7.50 7.50 2 7.00 14.00 3 6.50 19.50 4 6.00 24.00 5 5.50 27.50 6 5.00 30.00 -Refer to Table 9.1.What does the table show?

In monopolistic competition there is/are ______.

A situation in which each firm chooses the best strategy given the strategies chosen by other firms is called a ________.

Which of the following is not a characteristic of a monopolistically competitive firm in long-run equilibrium?

The study of how people make decisions in situations in which attaining their goals depends on their interactions with others is called ______.

A prisoner's dilemma leads to a non-cooperative equilibrium.

The equilibrium in the prisoner's dilemma is a dominant strategy Nash equilibrium.

Figure 9.12 -Refer to Figure 9.12.The diagram depicts a firm ________.

We can draw demand curves for firms in perfectly competitive and monopolistically competitive industries,but not for oligopoly firms.The reason for this is _________.

Suppose Jason owns a small pastry shop.Jason wants to maximise his profit,and thinking back to the university microeconomics class he took,he decides he needs to produce a quantity of pastries which will minimise his average total cost.Will Jason's strategy necessarily maximise profits for his pastry shop?

Assume price exceeds average variable cost over the relevant range of demand.If a monopolistically competitive firm is producing at an output where marginal revenue is $23 and marginal cost is $19,then to maximise profits the firm should ______.

Consider a U-shaped long-run average cost curve that has a minimum efficient scale at 6000 units of output.In this case,this industry would be _________.