Exam 9: Monopolistic Competition and Oligopoly

Which of the following is an example of a way in which a firm in oligopoly can escape the prisoner's dilemma?

If economies of scale are significant,the typical firm will not reach the minimum point on its long-run average cost curve until it has produced a large fraction of industry sales.

Which of the following is not a characteristic of monopolistic competition?

Figure 9.14 -Refer to Figure 9.14.Economies of scale are exhausted at which output level?

Firms in monopolistic competition compete by selling similar,but not identical products.

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 portion of the marginal revenue of the 5th unit is due to the output effect and what portion is due to the price effect?

How do consumers benefit from monopolistic competition?

A form of implicit collusion where one firm in an oligopoly announces a price change which is matched by other firms in the same industry is ________.

Occupational licensing is an example of an entry barrier that improves a country's standard of living.

Why do economists refer to the pricing strategies of oligopoly firms as a prisoner's dilemma game? __________________________________________________________________________________________________________________________________________________________________________________________

An oligopolistic industry is characterised by a few large firms acting independently.

What is an oligopoly? Give two examples of oligopolistic industries in Australia. __________________________________________________________________________________________________________________________________________________________________________________________

For a profit-maximising monopolistically competitive firm,for the last unit sold,the marginal cost of production is less than the marginal benefit received by a customer from the purchase of that unit.

Sparkle,one of many firms in the market for toothpaste,is in long-run equilibrium.Sparkle has a small market share and has been in business for a long time. a.Identify the market structure in which Sparkle operates.Explain your answer. b.What is Sparkle's profit or loss? Explain your answer.If you cannot determine the profit or loss,explain what information is missing. c.Draw a diagram showing Sparkle's demand curve,marginal revenue curve,average total cost curve,and marginal cost curve.Label your diagram. __________________________________________________________________________________________________________________________________________________________________________________________

An oligopolist's demand curve is ______.

Figure 9.7 Figure 9.7 shows short-run cost and demand curves for a monopolistically competitive firm in the footwear market. -Refer to Figure 9.7.Which of the following statements describes the best course of action for the firm depicted in the diagram?

Explain the differences between total revenue,average revenue,and marginal revenue. __________________________________________________________________________________________________________________________________________________________________________________________

Figure 9.3 -Refer to Figure 9.3.The marginal revenue of the sixth unit of output is _____.

Figure 9.14 -Refer to Figure 9.14.If the diagram represents a typical firm in the market,what is likely to happen to its average cost of production in the long run?

Figure 9.17 -Refer to Figure 9.17.The productively efficient output for the firm represented in the diagram is _____.