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Exam 10: Monopolistic Competition

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Question 31

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Figure 10-4 Figure 10-4 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches. -Refer to Figure 10-4.What is the area that represents the total fixed cost of production?

A) 0P₁aQ_a
B) P₀adP₃
C) P₁bdP₃
D) That information cannot be determined from the graph.

E) None of the above
F) B) and C)

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Question 32

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The key characteristics of a monopolistically competitive market structure include

A) few sellers.
B) sellers selling similar but differentiated products.
C) high barriers to entry.
D) sellers acting to maximise revenue.

E) A) and B)
F) None of the above

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Question 33

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Table 10-3 Table 10-3 shows the demand and cost schedules for a monopolistically competitive firm. -Refer to Table 10-3.What are the profit-maximising/loss-minimising output level and price?

Because the monopolistically competitive firm faces a ________ demand curve for its product,it ________ the price of its output.

If the demand curve for a firm is downward sloping,its marginal revenue curve

A monopolistically competitive firm can convince buyers that its product has value by differentiating its product to suit consumers' preferences.

Long-run equilibrium under monopolistic competition is similar to long-run equilibrium under perfect competition in that

What is the difference between the terms 'marketing' and 'advertising'?

Productive efficiency does not hold for a profit-maximising,monopolistically competitive firm in the long-run equilibrium because the firm operates along the diseconomies-of-scale region of its average total cost curve.

If buyers of a monopolistically competitive product feel the products of different sellers are strongly differentiated,then the demand for each seller's product is

Figure 10-12 -Refer to Figure 10-12.What is the amount of excess capacity?

If a perfectly competitive firm maximises short-run profits,its marginal revenue will be positive and less than its price.

How would a marketing campaign directed at single women improve the chances of success at a place like a cigar bar?

Why do most firms in monopolistic competition typically make zero profit in the long run?

If price exceeds average variable cost but is less than average total cost,a firm

Figure 10-15 Figure 10-15 illustrates a monopolistically competitive firm. -Refer to Figure 10-15.Which of the following statements describes the firm depicted in the diagram?

Table 10-3 Table 10-3 shows the demand and cost schedules for a monopolistically competitive firm. -Refer to Table 10-3.What is its average variable cost of production at its optimal output level?

In monopolistic competition,if a firm produces a highly desirable product relative to its competitors,the firm will be able to raise its price without losing any customers.

A monopolistically competitive market is described as one in which there are

In the highly competitive fast-food restaurant market,brand name restaurants have a strong profit incentive to maintain high sanitary conditions and avoid any negative consequences.