Question 1

How do product development and marketing affect a firm in monopolistic competition?

Accepted Answer

Product development and marketing have t

Question 2

OPEC,the Organization of Petroleum Exporting Countries,was formed in Baghdad in 1960.Since its formation,this cartel has suffered from a major problem with respect to the quota (limit)of output it assigns each member nation.What is OPEC's goal and what sort of quota do you think the cartel assigns? How and why do nations cheat on their quota? What happens when a nation cheats on its quota?

Accepted Answer

In order to keep oil prices high,as has

Question 3

The prisoners' dilemma game

Accepted Answer

A) shows that prisoners are better off if they cooperate. 
B) shows it is easy to cooperate. 
C) has an equilibrium in which both prisoners are made as well off as possible. 
D) would have the same outcome even if the prisoners can communicate and cooperate. 
E) has an equilibrium in which one prisoner is made as well off as possible and the other prisoner is made as worse off as possible. 
A) shows that prisoners are better off if they cooperate. 
B) shows it is easy to cooperate. 
C) has an equilibrium in which both prisoners are made as well off as possible. 
D) would have the same outcome even if the prisoners can communicate and cooperate. 
E) has an equilibrium in which one prisoner is made as well off as possible and the other prisoner is made as worse off as possible.

Question 4

Draw an example of a firm in monopolistic competition that is earning an economic profit.Be sure to label all the curves.Indicate the area that equals the firm's economic profit.

Accepted Answer

@#IMG-DLM& The compl

Question 5

The concepts of mutual interdependence and game theory illustrate the fact that firms competing in oligopoly

Accepted Answer

A) consider the actions of the rivals before changing the price of their product. 
B) ignore the actions of their rivals when considering price changes. 
C) engage in frequent price changes. 
D) never change prices. 
E) will mutually determine the combined best outcome for all players. 
A) consider the actions of the rivals before changing the price of their product. 
B) ignore the actions of their rivals when considering price changes. 
C) engage in frequent price changes. 
D) never change prices. 
E) will mutually determine the combined best outcome for all players.

Question 6

If you have found the percentage of the value of total revenue accounted for by the four largest firms in an industry,you have found the

Accepted Answer

A) elasticity of demand value. 
B) elasticity of supply value. 
C) Herfindahl-Hirschman Index. 
D) four-firm concentration ratio. 
E) monopolistic concentration index. 
A) elasticity of demand value. 
B) elasticity of supply value. 
C) Herfindahl-Hirschman Index. 
D) four-firm concentration ratio. 
E) monopolistic concentration index.

Question 7

The darkened area in the figure above is the

Accepted Answer

A) deadweight loss. 
B) firm's economic profit. 
C) consumer surplus. 
D) firm's total cost. 
E) firm's total revenue. 
A) deadweight loss. 
B) firm's economic profit. 
C) consumer surplus. 
D) firm's total cost. 
E) firm's total revenue.

Question 8

When firms in an oligopoly successfully collude and do not cheat on a cartel agreement,they can achieve long-run economic profit similar to

Accepted Answer

A) perfect competition. 
B) monopoly. 
C) monopolistic competition. 
D) non-colluding oligopolies. 
E) the firms in regulated industries. 
A) perfect competition. 
B) monopoly. 
C) monopolistic competition. 
D) non-colluding oligopolies. 
E) the firms in regulated industries.

Question 9

In a market in which firms operate in monopolistic competition,

Accepted Answer

A) the HHI for a single firm exceeds 2500. 
B) firms compete on price,quality and marketing. 
C) in the long run firms produce at their efficient scale. 
D) in the long run firms are not able to charge a markup. 
E) advertising is nonexistent. 
A) the HHI for a single firm exceeds 2500. 
B) firms compete on price,quality and marketing. 
C) in the long run firms produce at their efficient scale. 
D) in the long run firms are not able to charge a markup. 
E) advertising is nonexistent.

Question 10

The larger the four-firm concentration ratio,the ________ competition within an industry;the larger the Herfindahl-Hirschman Index,the ________ competition within an industry.

Accepted Answer

A) more;more 
B) more;less 
C) less;more 
D) less;less 
E) The premise of the question is wrong because the four-firm concentration ratio applies only to markets with four firms in it and these markets are,by definition,not competitive. 
A) more;more 
B) more;less 
C) less;more 
D) less;less 
E) The premise of the question is wrong because the four-firm concentration ratio applies only to markets with four firms in it and these markets are,by definition,not competitive.

Question 11

-The demand and cost schedules for a firm in monopolistic competition are in the above tables.What is the profit-maximizing level of output and price? What amount of profit is the firm earning? Is this firm in a short-run or long-run equilibrium? Why?

Accepted Answer

To determine the quantity produced,the f

Question 12

Even though monopolistic competition results in inefficiency,it does have which of the following benefits for society?

Accepted Answer

A) Firms earn zero economic profit in the long run. 
B) Firms can earn an economic profit in the short run. 
C) Product variety benefits consumers. 
D) Marginal cost equals price in the long run. 
E) The premise of the question is incorrect because nothing in monopolistic competition justifies any economic inefficiency. 
A) Firms earn zero economic profit in the long run. 
B) Firms can earn an economic profit in the short run. 
C) Product variety benefits consumers. 
D) Marginal cost equals price in the long run. 
E) The premise of the question is incorrect because nothing in monopolistic competition justifies any economic inefficiency.

Question 13

In the long run,advertising by all firms in a monopolistically competitive industry

Accepted Answer

A) increases all firms' demand. 
B) decreases all firms' demand. 
C) lowers all firms' costs. 
D) might increase or decrease the firms' prices. 
E) lowers all firms' prices. 
A) increases all firms' demand. 
B) decreases all firms' demand. 
C) lowers all firms' costs. 
D) might increase or decrease the firms' prices. 
E) lowers all firms' prices.

Question 14

The tool that economists use to analyze the mutual interdependence of oligopolies is

Accepted Answer

A) economies of scale. 
B) the four-firm concentration ratio. 
C) game theory. 
D) the HHI. 
E) the efficient scale. 
A) economies of scale. 
B) the four-firm concentration ratio. 
C) game theory. 
D) the HHI. 
E) the efficient scale.

Question 15

"One of the defining features of monopolistic competition is product variety." Is the previous statement correct or incorrect?

Accepted Answer

The statement is correct.In mo

Question 16

Explain what a cartel is and the difficulties faced in maintaining a cartel.

Accepted Answer

A cartel is a group of firms acting toge

Question 17

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

Accepted Answer

A) few firms compete 
B) easy entry and exit 
C) small market share 
D) differentiated product 
E) no barriers to entry or exit 
A) few firms compete 
B) easy entry and exit 
C) small market share 
D) differentiated product 
E) no barriers to entry or exit

Question 18

In monopolistic competition,the entry of new firms

Accepted Answer

A) shifts existing firms' demand curves rightward. 
B) shifts existing firms' demand curves leftward. 
C) only results in a movement along the existing firms' demand curves. 
D) has no effect on the existing firms' demand curves. 
E) shifts existing firms' supply curves rightward. 
A) shifts existing firms' demand curves rightward. 
B) shifts existing firms' demand curves leftward. 
C) only results in a movement along the existing firms' demand curves. 
D) has no effect on the existing firms' demand curves. 
E) shifts existing firms' supply curves rightward.

Question 19

A firm is spending the profit-maximizing amount on product development when

Accepted Answer

A) people perceive the firm's product to be better than those of its competitors. 
B) the marginal cost of product development is equal to the marginal revenue from product development. 
C) the price of the good is higher than its marginal cost. 
D) the advertising costs are covered. 
E) the firm's total revenue exceeds its total costs. 
A) people perceive the firm's product to be better than those of its competitors. 
B) the marginal cost of product development is equal to the marginal revenue from product development. 
C) the price of the good is higher than its marginal cost. 
D) the advertising costs are covered. 
E) the firm's total revenue exceeds its total costs.

Question 20

Which of the following is correct?

Accepted Answer

A) A firm in monopolistic competition does not have excess capacity in the long run. 
B) A firm in perfect competition operates at maximum average total cost in the long run. 
C) In the long run,a firm in monopolistic competition maximizes its profit at a point where price is equal to average total cost but the average total cost is not minimized. 
D) In the long run,a firm in monopolistic competition earns zero economic profit and its price is equal to the minimum average total cost. 
E) In the long run,a firm in monopolistic competition can earn an economic profit because of product differentiation. 
A) A firm in monopolistic competition does not have excess capacity in the long run. 
B) A firm in perfect competition operates at maximum average total cost in the long run. 
C) In the long run,a firm in monopolistic competition maximizes its profit at a point where price is equal to average total cost but the average total cost is not minimized. 
D) In the long run,a firm in monopolistic competition earns zero economic profit and its price is equal to the minimum average total cost. 
E) In the long run,a firm in monopolistic competition can earn an economic profit because of product differentiation.

How do product development and marketing affect a firm in monopolistic competition?

The prisoners' dilemma game

Draw an example of a firm in monopolistic competition that is earning an economic profit.Be sure to label all the curves.Indicate the area that equals the firm's economic profit.

The concepts of mutual interdependence and game theory illustrate the fact that firms competing in oligopoly

If you have found the percentage of the value of total revenue accounted for by the four largest firms in an industry,you have found the

The darkened area in the figure above is the

When firms in an oligopoly successfully collude and do not cheat on a cartel agreement,they can achieve long-run economic profit similar to

In a market in which firms operate in monopolistic competition,

The larger the four-firm concentration ratio,the competition within an industry;the larger the Herfindahl-Hirschman Index,the competition within an industry.

-The demand and cost schedules for a firm in monopolistic competition are in the above tables.What is the profit-maximizing level of output and price? What amount of profit is the firm earning? Is this firm in a short-run or long-run equilibrium? Why?

Even though monopolistic competition results in inefficiency,it does have which of the following benefits for society?

In the long run,advertising by all firms in a monopolistically competitive industry

The tool that economists use to analyze the mutual interdependence of oligopolies is

"One of the defining features of monopolistic competition is product variety." Is the previous statement correct or incorrect?

Explain what a cartel is and the difficulties faced in maintaining a cartel.

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

In monopolistic competition,the entry of new firms

A firm is spending the profit-maximizing amount on product development when

Which of the following is correct?

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

How do product development and marketing affect a firm in monopolistic competition?

The prisoners' dilemma game

Draw an example of a firm in monopolistic competition that is earning an economic profit.Be sure to label all the curves.Indicate the area that equals the firm's economic profit.

The concepts of mutual interdependence and game theory illustrate the fact that firms competing in oligopoly

If you have found the percentage of the value of total revenue accounted for by the four largest firms in an industry,you have found the

The darkened area in the figure above is the

When firms in an oligopoly successfully collude and do not cheat on a cartel agreement,they can achieve long-run economic profit similar to

In a market in which firms operate in monopolistic competition,

The larger the four-firm concentration ratio,the ________ competition within an industry;the larger the Herfindahl-Hirschman Index,the ________ competition within an industry.

-The demand and cost schedules for a firm in monopolistic competition are in the above tables.What is the profit-maximizing level of output and price? What amount of profit is the firm earning? Is this firm in a short-run or long-run equilibrium? Why?

Even though monopolistic competition results in inefficiency,it does have which of the following benefits for society?

In the long run,advertising by all firms in a monopolistically competitive industry

The tool that economists use to analyze the mutual interdependence of oligopolies is

"One of the defining features of monopolistic competition is product variety." Is the previous statement correct or incorrect?

Explain what a cartel is and the difficulties faced in maintaining a cartel.

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

In monopolistic competition,the entry of new firms

A firm is spending the profit-maximizing amount on product development when

Which of the following is correct?

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

The larger the four-firm concentration ratio,the competition within an industry;the larger the Herfindahl-Hirschman Index,the competition within an industry.