Chapter 25 Review.doc

Chapter 25 Review.doc - Chapter 25 1 Which of the following...

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Chapter 25 — 1. Which of the following is not an assumption of the theory of monopolistic competition? 2. Which of the following is one of the assumptions upon which the theory of monopolistic competition is built? 3. In a monopolistic competitive industry, 4. In a monopolistic competitive market, which of the following factors probably does not give rise to product differentiation? 5. Which of the following industries is the best real-world example of monopolistic competition? 6. The monopolistic competitive firm faces a ___________________ demand curve. 7. The monopolistic competitor faces a _____________________ demand curve and therefore is a price __________. 8. If a monopolistic competitive firm raises its price, then 9. Compared to a monopolistic competitor, a monopolist produces a good with __________ substitutes and so has a __________ elastic demand curve. 10. Some monopolistic competitors earn positive economic profits in the long run because 11. Which of the following is an example of a monopolistic competitor? 12. false : 13. The demand curve facing a monopolistic competitive firm will be __________ than the demand curve facing a perfectly competitive firm, because the price elasticity of demand for the monopolistic competitive firm's product is __________ than that for the perfectly competitive firm. 14. One of the ways in which monopolistic competitors differ from perfect competitors is that 15. The demand curve facing a monopolistic competitor will be more elastic than the demand curve facing a monopolist because 16. false : 17. Does the monopolistic competitive firm exhibit resource-allocative efficiency? 18. The monopolistic competitive firm produces the output at which
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19. The perfectly competitive firm charges a price equal to __________ while the monopolistic competitor firm charges a price __________. 20. The relationship between a monopolistic competitor's marginal revenue curve and its demand curve is that the 21. If a perfectly competitive firm and a monopolistic competitive firm face the same demand and cost curves, then 22. true: 23. Why can't an economist say for certain that a monopolistic competitive firm will always earn zero economic profits in the long run? 24. The excess capacity theorem states that a monopolistic competitor 25. A firm in a monopolistic competitive industry will produce an output level at which 26. "In equilibrium, a monopolistic competitor will produce an output level that is less than the level that would minimize its average total costs." This is a statement of the 27. In long run equilibrium, the monopolistic competitor will most likely 28. Generally, the monopolistic competitor is in long run equilibrium when 29. If a perfectly competitive firm and a monopolistic competitor in long run equilibrium face the same demand and cost curves, then the competitive firm will produce a 30. Some economists contend that a monopolistic competitor tends to produce too __________ output, charges a price that is too __________ and __________ its present plant size.
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