SCAN0817_000 - Chapter Sixteen. 1. Name: Date: Which of the...

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Unformatted text preview: Chapter Sixteen. 1. Name: Date: Which of the foliowing industries is most iikely to be monopolistically competitive? A) automobiles B) fresh bagel shops C) corn D) an electric utility . A monopolistically competitive industry such as baked goods and a perfectly competitive industry like Wheat fanning are alike in that: A) firms in both types of industries produce identical products. B) firms in both types of industries produce similar but not identical products. C) barriers to entry in both industries are large. D) there are many firms in each industry. . In monopolistic competition: A) there is free entry and exit in the long run. B) each firm produces a standardized product. C) there are few producers. D) there are barriers to entry. . In monopolistic competition, each firm: A) is a price—taker. B) has some ability to set the price of its differentiated good. C) will set price equal to marginal cost. D) has marginal revenue that is greater than price. . If the toothpaste market is monopolistically competitive, product differentiation wili take place in which of the following fonns? A) different varieties of toothpaste—~i.ncluding whitening agents B) differentiation in the locations where certain toothpastes are available C) quality differences among the various brands D) all of these forms . The women's dress industry is monopolistically competitive. This means that the following condition applies to this industry: A) There are thousands of dress suppliers, all selling identical products. B) Dresses tend to be differentiated among the many sellers serving this market. C) There is freedom of enhy but not exit in this industry. D) Prices tend to be lower than if the dress industry approximated perfect competition. . Monopolistic competition is similar to perfect competition in that firms in both market structures: A) are price-takers. B) produce goods that are perfect substitutes. C) find it beneficial to advertise. D) do not face any barriers to entry into the industry in the long run. Chapter Sixteen Page 1 8. 10. 11. 1.2. 13. 14. In mon0polistic competition: A) firms earn zero economic profits in the long run. B) each firm produces an identical product to every other firm in the industry. C) firms are aware of their strategic interdependence. D) firms earn large economic profits in the long run. . For the monopolistically competitive seafood market, the demand curve for any individual firm is A) B) C) D) , and there are downward-sloping; a few upwardwsloping; many vertical; a few downward—sloping; many producers of seafood. An industry characterized by many firms, producing similar but differentiated products, in a market with easy entry and exit, is called: A) perfect competition. B) monopoly. C) monopolistic competition. D) oligopoly. An example of monopolistic competition is the market. A) restaurant 13) soft-drink C) automobile D) breakfast cereal In iarge shopping areas, the retail market is most illustrative of: A) monopolistic competition. B) monopoly. C) perfect competition. D) perfect oligopoly. Which of the following is not a characteristic of monopolistic competition? A) product differentiation B) lack of barriers to entry and exit in the long run C) many competing producers ' D) tacit collusion The market for dentists in most communities can be considered because there are a large number of similar, but not identical, substitutes in the market. A) monopolistic competition B) a monopoly C) perfect competition D) an oligopoly Chapter Sixteen Page 2 15.. l6. 17. 18. 19. 20. 21. Monopolistic competition is an industry characterized by which of the following? A) a product with many close substitutes B) a horizontal demand curve C) a srnail number of firms D) barriers to entry and exit Monopolistic competition is different from monopoly due to which one of the following features? A) firms have some power to set prices B) downwardusloping demand curve C) firms face some competition ID) downward—sioping marginal revenue curve Many customers will walk right past a diner that serves coffee and go to Starbucks and pay more for a cup of coffee. For these customers, cups of coffee are differentiated by: A) style. B) location. C) quality. D) type- To maximize profit, a monopolistically competitive firm should produce the level of output at which: _ A) marginal revenue equals marginal cost. B) price equals marginal cost. C) price equals total cost. D) marginal revenue equals price. Monopolistiealiy competitive firms have zero economic profits in the long run because of: A) B) C) D) excess capacity. price wars ameng firms. easy entry and exit. excessive advertising. Price for a film under monopolistic competition is: A) equai to marginal revenue. B) greater than marginal revenue. C) less than marginal revenue. D) greater than total revenue. The profit-maximizing iule MC = MR is followed by firms under: A) monopolistic competition, but not perfect competition. B) perfect competition, but not monopolistic competition. C) either monopolistic competition or perfect competition, depending on the costs of production. D) both monopolistic competition and perfect competition. Chapter Sixteen Page 3 22. 23. 24. 25. 26. 27. 28. Product differentiation under monopolistic competition means that each finn: A) charges slightly different prices. B) has a pure monopoly. C) maximizes profit where 1111C = P. D) faces a horizontal demand curve. Which of the following is true? A) When choosing the profitumaximizing quantity, the short-run decision-making process for a firm in perfect competition and a firm in monopolistic competition is the same, since they produce the quantity where P > MC. In the long run in perfect competition, economic profits = 0, and in monopolistic competition in the long run, economic profits are very iarge. In perfect competition, P a MC, and in monopolistic competition, MR = MC, but P > MC and there is excess capacity. In both perfect competition and monopolistic competition, P equals minimum average totai cost in the long run. B) C) D) A monopolisticaiiy competitive firm is operating in the long run at the Optimal level of output. Which of the following must be true? A) P=ATC=MR2MC B) P>ATC>MR =MC C) P=ATC>MR>MC D) P=ATC>MR=MC The failure to produce enough to minimize average total cost is termed: A) economic profits. B) excess capacity. C) advertising. D) excess production. The main characteristic that distinguishes monopolistic competition from perfect competition is: A) easy entry and exit. B) many firms. C) differentiated products. D) that in perfect competition, to maximize profits, a firm will produce where MR m MC. Monopoiistic competition within an industry results in: A) overutilization of plants. B) chronic excess capacity. C) less advertising than in perfect competition. D) lower prices than in perfect competition. Due to the existence of a large number of similar, but not identical, substitutes in most communities, the market for financial planners is best Considered: A) a monopoly. B) an oiigopoly. C) perfect competition. D) monopolistic competition. Chapter Sixteen Page 4 ...
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SCAN0817_000 - Chapter Sixteen. 1. Name: Date: Which of the...

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