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200810021151080

200810021151080 - Microeconomics Testbank 1(Hubbard/O'Brien...

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Microeconomics – Testbank 1, (Hubbard/O’Brien) Chapter 12: Monopolistic Competition: The Competitive Model in a More Realistic Setting MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) If a typical monopolistically competitive firm is losing money in an economic sense, then: A) as some firms leave, the remaining firms find the demand for their product increasing. B) as some firms leave, the remaining firms find the demand for their product becomes more elastic. C) all firms will exit the market. D) all of the above happen. Answer: A Diff: 2 Page Ref: 395 2) An advantage of trademarking your product is: Diff: 2 Page Ref: 404 3) If a monopolistically competitive firm cuts its price from $10 where it sold 25 units to $9 and sells five more units of output, its marginal revenue per unit of output is: Diff: 3 Page Ref: 391 4) If a monopolistically competitive firm is producing at an output where marginal revenue is $23 and marginal cost is $19, then to maximize profits the firm will: Diff: 2 Page Ref: 394 5) To maximize profits, a monopolistically competitive firm would produce the output where: A) marginal revenue equals price. B) marginal revenue equals marginal cost. C) price equals average total cost. D) price equals marginal cost. Answer: B Diff: 2 Page Ref: 393 6) What is the purpose of advertising by a monopolistically competitive firm?
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Diff: 2 Page Ref: 403 7) If buyers of a monopolistically competitive product feel the products of different sellers have little differences between them, then: Diff: 2 Page Ref: 404 Refer to Figure 12.1 for the questions below. Figure 12.1
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