us14L1 - us14L1 1 Monopolistic competition is a market in...

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Unformatted text preview: us14L1 1 Monopolistic competition is a market in which _______ firms produce _______ goods and services. many; identical few; differentiated many; differentiated few; identical 2 The Netscape and Explorer browsers are an example of ___________________. perfectly competitive industries identical products product differentiation monopoly industries 3 A monopolistically competitive firm can increase its economic profit by _________. advertising less eliminating excess capacity producing at the efficient quantity developing new products 4 Selling costs of a monopolistically competitive firm are _____________. greater than a monopoly but less than a competitive firm the same as a competitive firm greater than a competitive firm or a monopoly the same as a monopoly 5 A market structure in which a small number of firms compete is called _________. a monopoly oligopolistic competition an oligopoly monopolistic competition 6 In game theory, strategies include _________________. all possible actions and payoffs of each player the payoff matrix all possible actions of each player the winning action of each player 7 A table that shows the payoffs for every possible action by each player for every possible action by the other player is called the ______________. strategy matrix strategy table payoff matrix game matrix 8 When each player takes the best possible action given the action of his opponent, _______________. both players deny a competitive equilibrium is reached a Nash equilibrium is reached one player denies and one player confesses 9 The outcome of a prisoners' dilemma game is a dominant strategy equilibrium in which ________________. both players win there is no equilibrium both players lose one player wins and one player loses 10 A duopoly occurs when _____________ ________________. one producer of two goods sells the goods in a monopoly market numerous producers of two goods compete in a competitive market two producers of a particular good compete in the same market two producers of two goods compete in an oligopoly market US14L2 1 In monopolistic competition in the long run, firms ______________________. incur an economic loss and require more capacity make an economic profit and have excess capacity make a normal profit and have excess capacity make a normal profit and require more capacity 2 Advertising costs are _______ costs and the per unit cost _______ as production increases. fixed; decreases variable; does not change variable; increases fixed; increases 3 In the kinked demand curve model of oligopoly, demand for the good is _______ elastic at prices below the current price because if one firm lowers the price, other firms will _______ their prices....
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This note was uploaded on 09/14/2011 for the course ECON 103 taught by Professor Gispy during the Spring '11 term at Prairie State College .

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us14L1 - us14L1 1 Monopolistic competition is a market in...

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