Question 1

Advertising is a ________ cost that is incurred by ________.

Accepted Answer

A) variable;monopolies 
B) variable;perfectly competitive firms 
C) fixed;perfectly competitive firms 
D) fixed;monopolistically competitive firms 
E) marginal;monopolistically competitive firms 
A) variable;monopolies 
B) variable;perfectly competitive firms 
C) fixed;perfectly competitive firms 
D) fixed;monopolistically competitive firms 
E) marginal;monopolistically competitive firms

Question 2

-The above figure shows a motel engaged in monopolistic competition with other motels.The figure above shows the ________ equilibrium in which the motel is ________.

Accepted Answer

A) short-run;earning an economic profit 
B) short-run;earning a normal profit 
C) long-run;earning an economic profit 
D) long-run;earning a normal profit 
E) short-run;incurring an economic loss 
A) short-run;earning an economic profit 
B) short-run;earning a normal profit 
C) long-run;earning an economic profit 
D) long-run;earning a normal profit 
E) short-run;incurring an economic loss

Question 3

What does monopolistic competition have in common with perfect competition?

Accepted Answer

A) a large number of firms and freedom of entry and exit 
B) a standardized product 
C) product differentiation 
D) the ability to earn an economic profit in the long run 
E) barriers to exit but no barriers to entry 
A) a large number of firms and freedom of entry and exit 
B) a standardized product 
C) product differentiation 
D) the ability to earn an economic profit in the long run 
E) barriers to exit but no barriers to entry

Question 4

-The above figure shows the market demand curve for long-distance telephone calls.Suppose the marginal cost of a long-distance telephone call is 2¢ a minute for a call no matter how many minutes of calls are made and there are 3 firms in the industry.If the firms in the industry operate as a monopoly,there are ________ minutes of calls made per hour.

Accepted Answer

A) between 0 and 3 million 
B) more than 3 million and less than or equal to 5 million 
C) more than 5 million and less than or equal to 7 million 
D) more than 7 million and less than or equal to 9 million 
E) more than 9 million 
A) between 0 and 3 million 
B) more than 3 million and less than or equal to 5 million 
C) more than 5 million and less than or equal to 7 million 
D) more than 7 million and less than or equal to 9 million 
E) more than 9 million

Question 5

A differentiated product has

Accepted Answer

A) many perfect substitutes. 
B) no close substitutes. 
C) no substitutes of any kind. 
D) close but not perfect substitutes. 
E) many different complements. 
A) many perfect substitutes. 
B) no close substitutes. 
C) no substitutes of any kind. 
D) close but not perfect substitutes. 
E) many different complements.

Question 6

A characteristic common in both oligopoly and monopolistic competition is:

Accepted Answer

A) a small number of firms compete in the market. 
B) natural or legal barriers prevent the entry of new firms into the market. 
C) each firm faces a downward-sloping demand curve. 
D) the firms in the market are interdependent. 
E) each firm has a large share of the market. 
A) a small number of firms compete in the market. 
B) natural or legal barriers prevent the entry of new firms into the market. 
C) each firm faces a downward-sloping demand curve. 
D) the firms in the market are interdependent. 
E) each firm has a large share of the market.

Question 7

"Duopoly" is

Accepted Answer

A) another name for monopoly. 
B) a special type of monopolistic competition. 
C) a two-firm oligopoly. 
D) a game with three players. 
E) the situation when a firm sets a duo (two)of different prices for its customers. 
A) another name for monopoly. 
B) a special type of monopolistic competition. 
C) a two-firm oligopoly. 
D) a game with three players. 
E) the situation when a firm sets a duo (two)of different prices for its customers.

Question 8

What do demand and marginal revenue curves look like in monopolistic competition? How do they compare to the demand and marginal revenue curves in perfect competition and monopoly?

Accepted Answer

In monopolistic competition,the product

Question 9

If a firm in monopolistic competition is earning an economic profit,

Accepted Answer

A) it is in the long run. 
B) other firms can enter the market. 
C) it can do so because it is "monopolistic" and other firms will have a hard time competing with it. 
D) its average cost must exceed its marginal cost. 
E) The question errs because firms in monopolistic competition cannot earn an economic profit. 
A) it is in the long run. 
B) other firms can enter the market. 
C) it can do so because it is "monopolistic" and other firms will have a hard time competing with it. 
D) its average cost must exceed its marginal cost. 
E) The question errs because firms in monopolistic competition cannot earn an economic profit.

Question 10

In monopolistic competition there are ________ barriers to entry,so therefore in the long run,economic profit ________.

Accepted Answer

A) no;is substantial 
B) no;equals zero 
C) many;equals zero 
D) many;is substantial 
E) many;might be earned depending on the degree of product differentiation 
A) no;is substantial 
B) no;equals zero 
C) many;equals zero 
D) many;is substantial 
E) many;might be earned depending on the degree of product differentiation

Question 11

What market structures other than oligopoly have the characteristic of one firm's actions affecting the actions of its competitors? Explain your answer.

Accepted Answer

No other market structure has the charac

Question 12

Describe the characteristics of an oligopoly.

Accepted Answer

There are a small number of firms that a

Question 13

Measures of concentration

Accepted Answer

A) refer to the concentration of customers in a certain area. 
B) measure whether the market is dominated by a small number of firms. 
C) measure the concentration of a large number of firms in a certain area. 
D) have high values for perfect competition. 
E) measure how concentrated a firm's sales are among certain types of goods. 
A) refer to the concentration of customers in a certain area. 
B) measure whether the market is dominated by a small number of firms. 
C) measure the concentration of a large number of firms in a certain area. 
D) have high values for perfect competition. 
E) measure how concentrated a firm's sales are among certain types of goods.

Question 14

The Herfindahl-Hirschman Index is the ________ of the percentage market share of each firm summed over the largest 50 firms in a market.

Accepted Answer

A) sum 
B) square 
C) square root 
D) cube 
E) negative 
A) sum 
B) square 
C) square root 
D) cube 
E) negative

Question 15

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 16

In monopolistic competition there

Accepted Answer

A) are many firms and many buyers. 
B) are several large firms. 
C) is one large firm. 
D) might be many,several,or one firm. 
E) are many firms but only a few buyers. 
A) are many firms and many buyers. 
B) are several large firms. 
C) is one large firm. 
D) might be many,several,or one firm. 
E) are many firms but only a few buyers.

Question 17

When a market has barriers to entry,

Accepted Answer

A) then in the long run it is possible for the firms to incur economic losses. 
B) then in the long run the only possible outcome for the firms is zero economic profit. 
C) then in the long run it might be possible for the firms to make economic profits. 
D) oligopolies cannot be created. 
E) the HHI almost always falls below 1,000. 
A) then in the long run it is possible for the firms to incur economic losses. 
B) then in the long run the only possible outcome for the firms is zero economic profit. 
C) then in the long run it might be possible for the firms to make economic profits. 
D) oligopolies cannot be created. 
E) the HHI almost always falls below 1,000.

Question 18

One of the major benefits to society of monopolistic competition is

Accepted Answer

A) high prices. 
B) restricted output. 
C) product differentiation. 
D) the excess capacity. 
E) the markup. 
A) high prices. 
B) restricted output. 
C) product differentiation. 
D) the excess capacity. 
E) the markup.

Question 19

In monopolistic competition,the products of different sellers are

Accepted Answer

A) identical. 
B) similar but slightly different. 
C) unique without any close or perfect substitutes. 
D) perfect substitutes. 
E) either identical or differentiated. 
A) identical. 
B) similar but slightly different. 
C) unique without any close or perfect substitutes. 
D) perfect substitutes. 
E) either identical or differentiated.

Question 20

A collusive agreement to form a cartel is difficult to maintain because

Accepted Answer

A) each member firm can increase its own profits by cutting its price and selling more. 
B) forming a cartel is legal but frowned upon throughout the world. 
C) supply will decrease because of the high cartel price. 
D) demanders will rebel once they realize a cartel has been formed. 
E) each firm can increase its profit if it decreases its production even more than the decrease set by the cartel. 
A) each member firm can increase its own profits by cutting its price and selling more. 
B) forming a cartel is legal but frowned upon throughout the world. 
C) supply will decrease because of the high cartel price. 
D) demanders will rebel once they realize a cartel has been formed. 
E) each firm can increase its profit if it decreases its production even more than the decrease set by the cartel.

Advertising is a cost that is incurred by .

-The above figure shows a motel engaged in monopolistic competition with other motels.The figure above shows the equilibrium in which the motel is .

What does monopolistic competition have in common with perfect competition?

A differentiated product has

A characteristic common in both oligopoly and monopolistic competition is:

"Duopoly" is

What do demand and marginal revenue curves look like in monopolistic competition? How do they compare to the demand and marginal revenue curves in perfect competition and monopoly?

If a firm in monopolistic competition is earning an economic profit,

In monopolistic competition there are barriers to entry,so therefore in the long run,economic profit .

What market structures other than oligopoly have the characteristic of one firm's actions affecting the actions of its competitors? Explain your answer.

Describe the characteristics of an oligopoly.

Measures of concentration

The Herfindahl-Hirschman Index is the ________ of the percentage market share of each firm summed over the largest 50 firms in a market.

Product differentiation involves making a product that is

In monopolistic competition there

When a market has barriers to entry,

One of the major benefits to society of monopolistic competition is

In monopolistic competition,the products of different sellers are

A collusive agreement to form a cartel is difficult to maintain because

Getting Started

The Usand 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

Advertising is a ________ cost that is incurred by ________.

-The above figure shows a motel engaged in monopolistic competition with other motels.The figure above shows the ________ equilibrium in which the motel is ________.

What does monopolistic competition have in common with perfect competition?

A differentiated product has

A characteristic common in both oligopoly and monopolistic competition is:

"Duopoly" is

What do demand and marginal revenue curves look like in monopolistic competition? How do they compare to the demand and marginal revenue curves in perfect competition and monopoly?

If a firm in monopolistic competition is earning an economic profit,

In monopolistic competition there are ________ barriers to entry,so therefore in the long run,economic profit ________.

What market structures other than oligopoly have the characteristic of one firm's actions affecting the actions of its competitors? Explain your answer.

Describe the characteristics of an oligopoly.

Measures of concentration

The Herfindahl-Hirschman Index is the ________ of the percentage market share of each firm summed over the largest 50 firms in a market.

Product differentiation involves making a product that is

In monopolistic competition there

When a market has barriers to entry,

One of the major benefits to society of monopolistic competition is

In monopolistic competition,the products of different sellers are

A collusive agreement to form a cartel is difficult to maintain because

Getting Started

The Usand 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

Advertising is a cost that is incurred by .

-The above figure shows a motel engaged in monopolistic competition with other motels.The figure above shows the equilibrium in which the motel is .

In monopolistic competition there are barriers to entry,so therefore in the long run,economic profit .