Question 1

Table 16-7
A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to 20.
 
-Refer to Table 16-7. If the firm produces its profit-maximizing level of output and there is a constant marginal cost of $7 per unit, which of the following is correct?

Accepted Answer

A)   This firm is operating at its efficient scale.
B)   This firm should expect its demand curve to shift to the left.
C)   Firms will leave the market and profits for firms that remain in the market will rise.
D)   This firm is in a long-run equilibrium.E) None of the above
F) B) and D)

Question 2

Monopolistic competition is considered inefficient because

Accepted Answer

A)   price exceeds marginal cost.
B)   output is excessive.
C)   long-run profits are positive.
D)   barriers to entry limit the number of firms in the market.E) A) and B)
F) B) and C)

Question 3

Figure 16-11 
-Refer to Figure 16-11. The profit for this firm is

Accepted Answer

A)   $375.
B)   $500.
C)   $1000.
D)   $1250.E) All of the above
F) A) and D)

Question 4

Figure 16-13 
-Refer to Figure 16-13. Which of the following areas represents the profit for this profit maximizing monopolistically competitive firm?

Accepted Answer

A)   BCHG
B)   BCIJ
C)   GHIJ
D)   0BCLE) All of the above
F) C) and D)

Question 5

If "too much choice" is a problem for consumers, it would occur in which market structure(s) ?

Accepted Answer

A)   perfect competition
B)   monopoly
C)   monopolistic competition
D)   perfect competition and monopolistic competitionE) A) and B)
F) None of the above

Question 6

A typical firm in the US economy would be classified as

Accepted Answer

A)   perfectly competitive.
B)   imperfectly competitive.
C)   a duopolist.
D)   an oligopolist.E) A) and B)
F) A) and C)

Question 7

List five goods that are likely sold in a monopolistically competitive market.

Accepted Answer

Books, CDs, movies, ...

Question 8

Suppose that monopolistically competitive firms in a certain market are experiencing losses. In the transition from this initial situation to a long-run equilibrium,

Accepted Answer

A)   the number of firms in the market decreases.
B)   each existing firm experiences a decrease in demand for its product.
C)   each firm experiences an upward shift of its marginal cost and average total cost curves.
D)   each existing firm's average total cost falls to bring economic profit back to zero.E) A) and B)
F) A) and C)

Question 9

Figure 16-3
This figure depicts a situation in a monopolistically competitive market. 
-Refer to Figure 16-3. How much consumer surplus will be derived from the purchase of this product at the monopolistically competitive price?

Accepted Answer

A)   $200
B)   $312.50
C)   $4000
D)   $800E) A) and D)
F) None of the above

Question 10

For a monopolistically competitive firm, at the profit-maximizing quantity of output,

Accepted Answer

A)   price exceeds marginal cost.
B)   marginal revenue exceeds marginal cost.
C)   marginal cost exceeds average revenue.
D)   price equals marginal revenue.E) A) and B)
F) C) and D)

Question 11

A firm charges a price that exceeds marginal cost

Accepted Answer

A)   when the market is a monopoly.
B)   when the market is a monopoly or monopolistically competitive.
C)   when the market is monopolistically competitive or perfectly competitive.
D)   when the market is perfectly competitive, monopolistically competitive, or monopolistid.E) None of the above
F) B) and C)

Question 12

Empirical evidence suggests that advertising usually leads to an increase in the price for advertised products.

Accepted Answer

A) True 
 B)False

Question 13

Under which of the following market structures would consumers likely pay the highest price for a product?

Accepted Answer

A)   perfect competition
B)   monopolistic competition
C)   oligopoly
D)   monopolyE) B) and D)
F) A) and B)

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) All of the above
F) A) and B)

Question 15

A monopolistically competitive firm faces the following demand curve for its product:  The firm has total fixed costs of $120 and a constant marginal cost of $12 per unit. We can conclude that

Accepted Answer

A)   firms will exit this market.
B)   firms will enter this market.
C)   this market is in long-run equilibrium.
D)   this firm is operating at its efficient scale.E) None of the above
F) All of the above

Question 16

Scenario 16-9
Dean goes to the grocery store to buy chips and soda for a party. He purchases brand name products even though generic versions are available at lower prices. His friend John says he was irrational to spend more for a nearly identical product. His friend Martina agreed with Dean's decision to spend more for the brand name products.
-Refer to Scenario 16-9. If Dean bought the brand name because of advertising he saw for the product, a defender of advertising would say

Accepted Answer

the advertising conv...

Question 17

The deadweight loss that is associated with a monopolistically competitive market is a result of

Accepted Answer

A)   price falling short of marginal cost in order to increase market share.
B)   price exceeding marginal cost.
C)   the firm operating in a regulated industry.
D)   excessive advertising costs.E) C) and D)
F) B) and D)

Question 18

A firm can earn economic profits in the short run

Accepted Answer

A)   only when the market is perfectly competitive.
B)   only when the market is a monopoly or monopolistically competitive.
C)   only when the market is monopolistically competitive or perfectly competitive.
D)   when the market is perfectly competitive, monopolistically competitive, or monopolistid.E) B) and D)
F) A) and B)

Question 19

Figure 16-9
The figure is drawn for a monopolistically-competitive firm. 
-Refer to Figure 16-9. The firm's maximum profit is

Accepted Answer

A)   $-5,000.00.
B)   $0.
C)   $5,000.00.
D)   $8,887.78.E) A) and B)
F) None of the above

Question 20

Which of the following is most likely sold in a monopolistically competitive market?

Accepted Answer

A)   sports drinks
B)   cable TV programming
C)   a share of McDonald's stock
D)   sunglassesE) All of the above
F) A) and D)

Exam 16: Monopolistic Competition

Under which of the following market structures would consumers likely pay the highest price for a product?

Correct Answer
verified

For a monopolistically competitive firm, at the profit-maximizing quantity of output,

Correct Answer
verified

A typical firm in the US economy would be classified as

Correct Answer
verified

When a monopolistically competitive firm raises its price,

Correct Answer
verified

Suppose that monopolistically competitive firms in a certain market are experiencing losses. In the transition from this initial situation to a long-run equilibrium,

Correct Answer
verified

A monopolistically competitive firm faces the following demand curve for its product: The firm has total fixed costs of $120 and a constant marginal cost of $12 per unit. We can conclude that

Correct Answer
verified

A firm charges a price that exceeds marginal cost

Correct Answer
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Figure 16-3 This figure depicts a situation in a monopolistically competitive market. -Refer to Figure 16-3. How much consumer surplus will be derived from the purchase of this product at the monopolistically competitive price?

Correct Answer
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Monopolistic competition is considered inefficient because

Correct Answer
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Figure 16-9 The figure is drawn for a monopolistically-competitive firm. -Refer to Figure 16-9. The firm's maximum profit is

Correct Answer
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A firm can earn economic profits in the short run

Correct Answer
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Figure 16-11 -Refer to Figure 16-11. The profit for this firm is

Correct Answer
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Empirical evidence suggests that advertising usually leads to an increase in the price for advertised products.

Correct Answer
verified

Figure 16-13 -Refer to Figure 16-13. Which of the following areas represents the profit for this profit maximizing monopolistically competitive firm?

Correct Answer
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Correct Answer
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the advertising conv...
View Answer

List five goods that are likely sold in a monopolistically competitive market.

Correct Answer
verified
Books, CDs, movies, ...
View Answer

If "too much choice" is a problem for consumers, it would occur in which market structure(s) ?

Correct Answer
verified

The deadweight loss that is associated with a monopolistically competitive market is a result of

Correct Answer
verified

Correct Answer
verified

Which of the following is most likely sold in a monopolistically competitive market?

Correct Answer
verified

Exam 16: Monopolistic Competition

Under which of the following market structures would consumers likely pay the highest price for a product?

Correct AnswerverifiedShow Answer

For a monopolistically competitive firm, at the profit-maximizing quantity of output,

Correct AnswerverifiedShow Answer

A typical firm in the US economy would be classified as

Correct AnswerverifiedShow Answer

When a monopolistically competitive firm raises its price,

Correct AnswerverifiedShow Answer

Suppose that monopolistically competitive firms in a certain market are experiencing losses. In the transition from this initial situation to a long-run equilibrium,

Correct AnswerverifiedShow Answer

A monopolistically competitive firm faces the following demand curve for its product: The firm has total fixed costs of $120 and a constant marginal cost of $12 per unit. We can conclude that

Correct AnswerverifiedShow Answer

A firm charges a price that exceeds marginal cost

Correct AnswerverifiedShow Answer

Figure 16-3 This figure depicts a situation in a monopolistically competitive market. -Refer to Figure 16-3. How much consumer surplus will be derived from the purchase of this product at the monopolistically competitive price?

Correct AnswerverifiedShow Answer

Monopolistic competition is considered inefficient because

Correct AnswerverifiedShow Answer

Figure 16-9 The figure is drawn for a monopolistically-competitive firm. -Refer to Figure 16-9. The firm's maximum profit is

Correct AnswerverifiedShow Answer

A firm can earn economic profits in the short run

Correct AnswerverifiedShow Answer

Figure 16-11 -Refer to Figure 16-11. The profit for this firm is

Correct AnswerverifiedShow Answer

Empirical evidence suggests that advertising usually leads to an increase in the price for advertised products.

Correct AnswerverifiedShow Answer

Figure 16-13 -Refer to Figure 16-13. Which of the following areas represents the profit for this profit maximizing monopolistically competitive firm?

Correct AnswerverifiedShow Answer

Correct Answerverifiedthe advertising conv...View AnswerShow Answer

List five goods that are likely sold in a monopolistically competitive market.

Correct AnswerverifiedBooks, CDs, movies, ...View AnswerShow Answer

If "too much choice" is a problem for consumers, it would occur in which market structure(s) ?

Correct AnswerverifiedShow Answer

The deadweight loss that is associated with a monopolistically competitive market is a result of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is most likely sold in a monopolistically competitive market?

Correct AnswerverifiedShow Answer

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the advertising conv...
View Answer

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Books, CDs, movies, ...
View Answer

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Correct Answer
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