econ10 - Submitted by Le Thao(THAOLE2 on 2:58:15 PM Points...

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Submitted by Le, Thao (THAOLE2) on 11/14/2011 2:58:15 PM Points Awarded 12.00 Points Missed 3.00 Percentage 80.0% 1. When a second firm enters a monopolist's market: A) market price will drop. B) sales for the first firm will rise. C) the first firm's profits will increase. D) All of the above will occur. Points Earned: 0.5/0.5 Correct Answer(s): A 2. When a second firm enters a monopolist's market: A) market price will rise. B) the quantity produced by the first firm will decrease. C) the first firm's profits increase. D) All of the above will occur. Points Earned: 0.5/0.5 Correct Answer(s): B 3. When a second firm enters a market, the original firm's profits decline because:
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A) the original firm's price decreases. B) the original firm's ATC increases. C) the original firm's quantity decreases. D) All of the above are correct. Points Earned: 0.5/0.5 Correct Answer(s): D 4. When a second firm enters a monopolist's market, the initial demand curve facing the monopolist will: A) shift to the left. B) shift to the right. C) remain the same. D) none of the above Points Earned: 0.5/0.5 Correct Answer(s): A 5. For many years North Carolina-based Krispy Kreme Doughnuts have been the choice of many Southerners. But now rival Dunkin' Donuts is working on changing the way Southerners expect a doughnut to taste. The Northeastern-based Dunkin' Donuts has plans to become a national brand in the next 15 years by tripling the number of stores in the USA. The difference is in the doughnut itself. Krispy Kreme offers a glazed, hot, lighter doughnut while the product of Dunkin' Donuts can be described as “thicker and cakier.” Do consumers notice the difference? Rosemary Evans from Alabama states, “Dunkin' Donuts just don't have much flavor.” And Jack Lehnhart from Ohio says Krispy Kremes are “wax doughnuts.” As the size of the industry grows the efforts to differentiate each product remain strong. Dunkin' Donuts focuses on coffee and baked goods as important components in its long term business plan. When discussing the two companies and their approaches to success, the brand officer at Dunkin' Donuts succinctly said, “We're very different.” Just take note of the different ways they spell the product they produce! What market structure best describes the doughnut industry discussed in the article above? A) monopolistic competition B) monopoly C) governmental D) perfect competition Points Earned: 0.5/0.5 Correct Answer(s): A
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6. Why would Dunkin' Donuts want to keep their product different from Krispy Kreme? A) They do not want Southerners confusing the two doughnuts. B) They want to maintain a specific brand identity. C) They do not have the level of technology to produce a Krispy Kreme-like doughnut. D) They do not want customers to accuse them of stealing trade secrets.
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This note was uploaded on 03/30/2012 for the course ECON 2302 taught by Professor Love during the Fall '08 term at Lone Star College.

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econ10 - Submitted by Le Thao(THAOLE2 on 2:58:15 PM Points...

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