Question 1

A concentration ratio

Accepted Answer

A)  measures the percentage of total sales of the top firm in the industry.
B)  reflects the level of competition in an industry.
C)  is inversely related to the price charged by the top firm in the industry.
D)  All of the above are correct.E) A) and C)
F) None of the above

Question 2

Figure 16-13 
-Refer to Figure 16-13. Use the letters to identify the deadweight loss associated with this firm's profit-maximizing production.

Accepted Answer

The answer of Figure 16-13 
-Refer to Figure 16-13. Use...

Question 3

Scenario 16-3
Peter operates an ice cream shop in the center of Fairfield. He sells several unusual flavors of organic, homemade ice cream so he has a monopoly over his own ice cream, though he competes with many other firms selling ice cream in Fairfield for the same customers. Peter's demand and cost values for sales per day are given in the table below. (Everyone who purchases Peter's ice cream buys a double scoop cone because it's so delicious.) 
-Refer to Scenario 16-3. What is the maximum amount of profit that Peter can earn per day?

Accepted Answer

The answer of Scenario 16-3
Peter operates an ice cream shop...

Question 4

When monopolistically competitive firms advertise, in the long run

Accepted Answer

A)  they will still earn zero economic profit.
B)  they can earn positive economic profit by increasing market share.
C)  the market price must fall.
D)  the market price must rise.E) A) and B)
F) B) and D)

Question 5

In monopolistically competitive markets, economic losses

Accepted Answer

A)  suggest that some existing firms will exit the market.
B)  suggest that new firms will enter the market.
C)  are minimized through government-imposed barriers to entry.
D)  are never possible.E) B) and D)
F) A) and B)

Question 6

Each firm in a monopolistically competitive market

Accepted Answer

A)  earns both short-run and long-run profits.
B)  faces a downward-sloping demand curve.
C)  cannot earn economic profit in the short run.
D)  sets price equal to marginal cost.E) All of the above
F) None of the above

Question 7

One theory of advertising suggests that

Accepted Answer

A)  advertising is more effective for industrial products than consumer products.
B)  the content of advertising may be irrelevant to product success in the market.
C)  regulations limiting advertising benefit consumers, but not producers.
D)  television advertising is more effective in reducing competition than ads on websites.E) A) and B)
F) None of the above

Question 8

Figure 16-4 
-Refer to Figure 16-4. At the profit-maximizing, or loss-minimizing, output level, how many units of output will the firm in this figure produce?

Accepted Answer

A)  20
B)  30
C)  40
D)  This firm will choose not to produce.E) A) and B)
F) A) and C)

Question 9

Figure 16-7 
-Refer to Figure 16-7. The firm depicted in panel b faces a horizontal demand curve. If panel b depicts a profit-maximizing firm,

Accepted Answer

A)  it could be operating in either a perfectly competitive market or in a monopolistically competitive market.
B)  it would not have excess capacity in its production as long as it is earning zero economic profit.
C)  it is able to choose the price at which it sells its product.
D)  the firm can always raise its profit by increasing production since consumers will buy as much as the firm can produce.E) B) and D)
F) All of the above

Question 10

Edward Chamberlin argued that governments should

Accepted Answer

A)  ban the use of brand names.
B)  not enforce the trademarks that companies use to identify their products.
C)  vigorously enforce the trademarks that companies use to identify their products.
D)  tax companies whose products have brand names in proportion to how much consumers recognize their products.E) All of the above
F) B) and D)

Question 11

Scenario 16-3
Peter operates an ice cream shop in the center of Fairfield. He sells several unusual flavors of organic, homemade ice cream so he has a monopoly over his own ice cream, though he competes with many other firms selling ice cream in Fairfield for the same customers. Peter's demand and cost values for sales per day are given in the table below. (Everyone who purchases Peter's ice cream buys a double scoop cone because it's so delicious.) 
-Refer to Scenario 16-3. When Peter maximizes his profits, how much revenue does he earn per day?

Accepted Answer

The answer of Scenario 16-3
Peter operates an ice cream shop...

Question 12

In a monopolistically competitive market,

Accepted Answer

A)  the entry of new firms creates externalities.
B)  the absence of restrictions on entry by new firms ensures that there will be no deadweight loss.
C)  there are always too many firms in the market relative to the socially-optimal number of firms.
D)  firms cannot earn positive economic profits in the short run.E) None of the above
F) A) and B)

Question 13

​A monopolistically competitive firm is currently charging a price of $10 and producing 12,000 units/month. It faces monthly fixed costs of $15,000 and has an average variable cost of $6/unit. In the long run, we would expect:

Accepted Answer

A)  ​The firm to go out of business
B)  ​The price will rise and output will fall
C)  ​The price will fall and output will fall
D)  ​The price will fall and output will riseE) C) and D)
F) B) and C)

Question 14

When a monopolistically competitive firm raises its price,

Accepted Answer

A)  quantity demanded falls to zero.
B)  quantity demanded declines but not to zero.
C)  the market supply curve shifts outward.
D)  quantity demanded remains constant.E) A) and B)
F) A) and C)

Question 15

In a market that is characterized by imperfect competition,

Accepted Answer

A)  firms are price takers.
B)  there are always a large number of firms.
C)  there are at least a few firms that compete with one another.
D)  the actions of one firm in the market never have any impact on the other firms' profits.E) None of the above
F) A) and B)

Question 16

​Deadweight losses are associated with monopolistic competition:

Accepted Answer

A)  ​In the short run, but not the long run
B)  ​In the long run, but not the short run
C)  ​In both the short and long run
D)  In neither the short run nor the long runE) A) and B)
F) C) and D)

Question 17

Which of the following statements is not correct?

Accepted Answer

A)  Critics of advertising argue that firms advertise to manipulate consumers' tastes.
B)  Defenders of advertising argue that advertising provides valuable product information to consumers.
C)  An industry with many brand name products will be more competitive than one with many generic products.
D)  The willingness of a firm to spend a large amount of money on advertising can signal the quality of the product.E) A) and B)
F) A) and C)

Question 18

Discuss how brand names may enhance the efficiency of markets in a less developed country.

Accepted Answer

Recognizable brand names signal quality ...

Question 19

Figure 16-13 
-Refer to Figure 16-13. Use the letters to identify the area of total cost for this firm.

Accepted Answer

The answer of Figure 16-13 
-Refer to Figure 16-13. Use...

Question 20

Figure 16-9
The figure is drawn for a monopolistically-competitive firm. 
-Refer to Figure 16-9. The quantity of output at which the MC and ATC curves cross is the

Accepted Answer

A)  efficient scale of the firm.
B)  short-run equilibrium quantity of output for the firm.
C)  long-run equilibrium quantity of output for the firm.
D)  All of the above are correct.E) A) and C)
F) A) and B)

Exam 16: Monopolistic Competition

When a monopolistically competitive firm raises its price,

Correct Answer
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In a market that is characterized by imperfect competition,

Correct Answer
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Each firm in a monopolistically competitive market

Correct Answer
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Figure 16-13 -Refer to Figure 16-13. Use the letters to identify the deadweight loss associated with this firm's profit-maximizing production.

Correct Answer
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When monopolistically competitive firms advertise, in the long run

Correct Answer
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One theory of advertising suggests that

Correct Answer
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A concentration ratio

Correct Answer
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In a monopolistically competitive market,

Correct Answer
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Figure 16-13 -Refer to Figure 16-13. Use the letters to identify the area of total cost for this firm.

Correct Answer
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Figure 16-4 -Refer to Figure 16-4. At the profit-maximizing, or loss-minimizing, output level, how many units of output will the firm in this figure produce?

Correct Answer
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Discuss how brand names may enhance the efficiency of markets in a less developed country.

Correct Answer
verified
Recognizable brand names signal quality ...
View Answer

A monopolistically competitive firm is currently charging a price of $10 and producing 12,000 units/month. It faces monthly fixed costs of $15,000 and has an average variable cost of $6/unit. In the long run, we would expect:

Correct Answer
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Figure 16-9 The figure is drawn for a monopolistically-competitive firm. -Refer to Figure 16-9. The quantity of output at which the MC and ATC curves cross is the

Correct Answer
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In monopolistically competitive markets, economic losses

Correct Answer
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Figure 16-7 -Refer to Figure 16-7. The firm depicted in panel b faces a horizontal demand curve. If panel b depicts a profit-maximizing firm,

Correct Answer
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Which of the following statements is not correct?

Correct Answer
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Correct Answer
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Deadweight losses are associated with monopolistic competition:

Correct Answer
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Edward Chamberlin argued that governments should

Correct Answer
verified

Exam 16: Monopolistic Competition

When a monopolistically competitive firm raises its price,

Correct AnswerverifiedShow Answer

In a market that is characterized by imperfect competition,

Correct AnswerverifiedShow Answer

Each firm in a monopolistically competitive market

Correct AnswerverifiedShow Answer

Figure 16-13 -Refer to Figure 16-13. Use the letters to identify the deadweight loss associated with this firm's profit-maximizing production.

Correct AnswerverifiedShow Answer

When monopolistically competitive firms advertise, in the long run

Correct AnswerverifiedShow Answer

One theory of advertising suggests that

Correct AnswerverifiedShow Answer

A concentration ratio

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In a monopolistically competitive market,

Correct AnswerverifiedShow Answer

Figure 16-13 -Refer to Figure 16-13. Use the letters to identify the area of total cost for this firm.

Correct AnswerverifiedShow Answer

Figure 16-4 -Refer to Figure 16-4. At the profit-maximizing, or loss-minimizing, output level, how many units of output will the firm in this figure produce?

Correct AnswerverifiedShow Answer

Discuss how brand names may enhance the efficiency of markets in a less developed country.

Correct AnswerverifiedRecognizable brand names signal quality ...View AnswerShow Answer

​A monopolistically competitive firm is currently charging a price of $10 and producing 12,000 units/month. It faces monthly fixed costs of $15,000 and has an average variable cost of $6/unit. In the long run, we would expect:

Correct AnswerverifiedShow Answer

Figure 16-9 The figure is drawn for a monopolistically-competitive firm. -Refer to Figure 16-9. The quantity of output at which the MC and ATC curves cross is the

Correct AnswerverifiedShow Answer

In monopolistically competitive markets, economic losses

Correct AnswerverifiedShow Answer

Figure 16-7 -Refer to Figure 16-7. The firm depicted in panel b faces a horizontal demand curve. If panel b depicts a profit-maximizing firm,

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

​Deadweight losses are associated with monopolistic competition:

Correct AnswerverifiedShow Answer

Edward Chamberlin argued that governments should

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
Recognizable brand names signal quality ...
View Answer

A monopolistically competitive firm is currently charging a price of $10 and producing 12,000 units/month. It faces monthly fixed costs of $15,000 and has an average variable cost of $6/unit. In the long run, we would expect:

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Deadweight losses are associated with monopolistic competition:

Correct Answer
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Correct Answer
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