examonoligopoly06 - Exam III 1.Monopolistic competition...

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Exam III 1.Monopolistic competition resembles pure competition because: A) both industries emphasize nonprice competition. B) in both instances firms will operate at the minimum point on their long-run average total cost curves. C) both industries entail the production of differentiated products. D) barriers to entry are either weak or nonexistent. 2. Which of the following is not a basic characteristic of monopolistic competition? A) the use of trademarks and brand names C) product differentiation B) recognized mutual interdependence D) a relatively large number of sellers 3. Nonprice competition refers to: A) competition between products of different industries, for example, competition between aluminum and steel in the manufacture of automobile parts. B) price increases by a firm that are ignored by its rivals. C) advertising, product promotion, and changes in the real or perceived characteristics of a product. D) reductions in production costs that are not reflected in price reductions. 4. A monopolistically competitive industry combines elements of both competition and monopoly . The monopoly element results from: A) the likelihood of collusion. C) product differentiation. B) high entry barriers. D) mutual interdependence in decision making. 5. A monopolistically competitive industry combines elements of both competition and monopoly . It is correct to say that the competitive element results from: A) a relatively large number of firms and the monopolistic element from product differentiation. B) product differentiation and the monopolistic element from high entry barriers. C) a perfectly elastic demand curve and the monopolistic element from low entry barriers. D) a highly inelastic demand curve and the monopolistic element from advertising and product promotion. 6. A monopolistically competitive firm has a: A) highly elastic demand curve. C) perfectly inelastic demand curve. B)
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This note was uploaded on 08/10/2010 for the course ASC 102 taught by Professor Johnh during the Spring '10 term at 카이스트, 한국과학기술원.

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examonoligopoly06 - Exam III 1.Monopolistic competition...

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