chp 13 test bank - CHAPTER 13MONOPOLISTIC COMPETITION AND...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: CHAPTER 13MONOPOLISTIC COMPETITION AND OLIGOPOLY MULTIPLE CHOICE 1. For a firm in monopolistically competitive market equilibrium: a. MC AC b. MR AR c. MR = MC d. P AC ANS: C 2. In oligopoly equilibrium: a. MC = AC b. MC > AC c. MR = MC d. MC > AC ANS: C 3. A perfectly functioning cartel results in a(n): a. monopoly equilibrium. b. oligopoly equilibrium. c. perfectly competitive equilibrium. d. monopolistically competitive equilibrium. ANS: A 4. A successfully exploited niche market involves elements of: a. perfect competition. b. monopolistic competition. c. monopoly. d. monopsony. ANS: C 5. In both monopolistic competition and oligopoly markets: a. there is easy entry and exit. b. consumers perceive differences among the products of various competitors. c. economic profits may be earned in the long run. d. there are many sellers. ANS: B 6. When prices in monopolistically competitive markets exceed those in a perfectly competitive equilibri- um, this difference is the cost of: a. information. b. market power. c. inefficiency. d. product differentiation. ANS: D 7. Monopolistic competition always entails: a. declining LRAC. b. vigorous price competition. c. increasing LRAC. d. constant LRAC. ANS: B 8. Monopolistic competition is characterized by: a. homogeneous products. b. barriers to entry and exit. c. perfect dissemination of information. d. few buyers and sellers. ANS: C 9. In a monopolistically competitive industry, firms: a. offer products that are not perfect substitutes. b. make decisions in light of expected reactions from other firms. c. set price equal to marginal cost. d. are price takers. ANS: A 10. The demand curve faced by a firm in a monopolistically competitive industry is: a. the downward sloping industry demand curve. b. downward sloping. c. more elastic than the perfectly competitive firm's demand curve. d. horizontal. ANS: B 11. In long-run equilibrium, the monopolistically competitive firm will set a price equal to: a. average cost. b. average variable cost. c. marginal cost. d. minimum long run average cost. ANS: A 12. A perfectly functioning cartel leads to a price/output combination identical to an industry that is: a. monopolistic. b. monopolistically competitive. c. oligopolistic. d. perfectly competitive. ANS: A 13. An formal agreement to set prices and output is called: a. collusion. b. monopolistic competition. c. kinked demand. d. a cartel. ANS: D 14. The demand faced by an industry price leader is: a. market demand. b. market demand plus the demand for output by follower firms. c. market demand less the supply of output by follower firms. d. kinked. ANS: C 15. The industry supply curve is derived through the horizontal summation of firm: a. average cost curves....
View Full Document

Page1 / 32

chp 13 test bank - CHAPTER 13MONOPOLISTIC COMPETITION AND...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online