Question 1

Which of the following statements is not correct?

Accepted Answer

A)   Novels are likely to be produced in a monopolistically competitive industry.
B)   Cable television is likely to be produced in a monopoly industry.
C)   Milk is likely to be produced in a monopolistically competitive industry.
D)   Cigarettes are likely to be produced in an oligopoly industry.E) A) and C)
F) B) and D)

Question 2

Advertising during the Super Bowl is an example of information about quality contained primarily in the existence and expense of the advertising.

Accepted Answer

A) True 
 B)False

Question 3

Figure 16-6 d in panel (d) ,it would A)  not be maximizing its profit. B)  be minimizing its losses. C)  be losing market share to other firms in the market. D)  be operating at excess capacity." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 16-6.If a firm in a monopolistically competitive market was producing the level of output depicted as Qd in panel (d) ,it would

Accepted Answer

A)   not be maximizing its profit.
B)   be minimizing its losses.
C)   be losing market share to other firms in the market.
D)   be operating at excess capacity.E) None of the above
F) All of the above

Question 4

Which of the following statements is not correct?

Accepted Answer

A)   Both monopolistically competitive and perfectly competitive firms can earn economic profits in the short run.
B)   Both monopolies and monopolistically competitive firms can earn economic profits in the long run.
C)   Firms in perfect competition,monopolistic competition,and monopoly maximize profits by producing where marginal revenue equals marginal cost.
D)   Only competitive firms produce the welfare-maximizing level of output.E) A) and D)
F) A) and C)

Question 5

A monopolistically competitive firm chooses its

Accepted Answer

A)   price and quantity just as a monopoly does.
B)   quantity but faces a horizontal demand curve just as a competitive firm does.
C)   price but can sell any quantity at the market price just as an oligopoly does.
D)   price and quantity based on the decisions of the other firms in the industry just as an oligopoly does.E) None of the above
F) C) and D)

Question 6

When McDonald's opens a store in Dhaka,Bangladesh,it has a strong incentive to enforce product quality consistent with stores in the United States.

Accepted Answer

A) True 
 B)False

Question 7

If regulators required firms in monopolistically competitive markets to set price equal to marginal cost,

Accepted Answer

A)   firms would most likely experience economic losses.
B)   firms would also operate at their efficient scale.
C)   new firms would likely to enter the market.
D)   the most efficient firms would not likely to be affected.E) A) and B)
F) None of the above

Question 8

In a small college town,four microbreweries have opened in the last two years.Demonstrate the effect of new market entrants on demand for existing firms (microbreweries)that already served this market.Assume that the local community now places a moratorium on new liquor licenses for microbreweries.How will this moratorium affect the long-run profitability of incumbent firms?

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> The arrival of a new entrant should be ...

Question 9

When a monopolistically competitive firm is in long-run equilibrium,

Accepted Answer

A)   price is equal to average total cost.
B)   price is equal to marginal cost.
C)   price is equal to marginal revenue.
D)   the firm operates at its efficient scale.E) None of the above
F) A) and C)

Question 10

Table 16-3
The following table shows the output produced by each of the top eight firms in four industries as well as the total industry output for those industries.
 
-Refer to Table 16-3.Which industry has the highest concentration ratio?

Accepted Answer

A)   Industry A
B)   Industry B
C)   Industry C
D)   Industry DE) A) and C)
F) None of the above

Question 11

Consider a monopolistically competitive firm in a market in long-run equilibrium.This firm is likely earning

Accepted Answer

A)   a positive economic profit since it is charging a price above marginal cost.
B)   no economic profit since it is charging a price equal to its marginal cost.
C)   a positive economic profit since it is charging a price above its average total cost.
D)   no economic profit since it is charging a price equal to it average total cost.E) C) and D)
F) A) and B)

Question 12

Brand names are rarely used to convey information about product quality.

Accepted Answer

A) True 
 B)False

Question 13

Table 16-5
This table shows the demand schedule,marginal cost,and average total cost for a monopolistically competitive firm.
 
-Refer to Table 16-5.Which of the following statements regarding this monopolistically competitive firm is correct?

Accepted Answer

A)   New firms will enter this market in the long run since firm profits are greater than zero.
B)   Firms will leave this market in the long run since firm profits are less than zero.
C)   This firm is currently in long-run equilibrium.
D)   This firm is currently in long-run equilibrium,and the firm is producing its efficient scale of output.E) None of the above
F) A) and D)

Question 14

In monopolistically competitive markets,positive economic profits

Accepted Answer

A)   suggest that some existing firms will exit the market.
B)   suggest that new firms will enter the market.
C)   are sustained through government-imposed barriers to entry.
D)   are never possible.E) None of the above
F) C) and D)

Question 15

In a monopolistically competitive market,

Accepted Answer

A)   the entry of new firms creates externalities.
B)   the absence of restrictions on entry by new firms ensures that there will be no deadweight loss.
C)   there are always too many firms in the market relative to the socially-optimal number of firms.
D)   firms cannot earn positive economic profits in the short run.E) A) and B)
F) A) and C)

Question 16

Figure 16-2
This figure depicts a situation in a monopolistically competitive market. 
-Refer to Figure 16-2.How much profit will the monopolistically competitive firm earn in this situation?

Accepted Answer

A)   $0
B)   $80
C)   $200
D)   $400E) C) and D)
F) All of the above

Question 17

A firm can earn economic profits in the short run

Accepted Answer

A)   only when the market is perfectly competitive.
B)   only when the market is a monopoly or monopolistically competitive.
C)   only when the market is monopolistically competitive or perfectly competitive.
D)   when the market is perfectly competitive,monopolistically competitive,or monopolistic.E) A) and B)
F) A) and C)

Question 18

When a profit-maximizing firm in a monopolistically competitive market charges a price higher than marginal cost,

Accepted Answer

A)   the firm must be earning a positive economic profit.
B)   the firm may be incurring economic losses
C)   there is a deadweight loss to society,but it is exactly offset by the benefit of excess capacity.
D)   new firms will enter the market in the long run.E) None of the above
F) All of the above

Question 19

Policymakers have generally come to accept the view that advertising enhances the efficiency of markets.

Accepted Answer

A) True 
 B)False

Question 20

Figure 16-2 
-Refer to Figure 16-2.What,if any,long run adjustment will occur in this industry?

Accepted Answer

firms will enter
pri...

Exam 16: Monopolistic Competition

Advertising during the Super Bowl is an example of information about quality contained primarily in the existence and expense of the advertising.

Correct Answer
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Figure 16-2 -Refer to Figure 16-2.What,if any,long run adjustment will occur in this industry?

Correct Answer
verified
firms will enter
pri...
View Answer

Policymakers have generally come to accept the view that advertising enhances the efficiency of markets.

Correct Answer
verified

When a monopolistically competitive firm is in long-run equilibrium,

Correct Answer
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In a monopolistically competitive market,

Correct Answer
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A monopolistically competitive firm chooses its

Correct Answer
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Figure 16-2 This figure depicts a situation in a monopolistically competitive market. -Refer to Figure 16-2.How much profit will the monopolistically competitive firm earn in this situation?

Correct Answer
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Correct Answer
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The arrival of a new entrant should be ...
View Answer

Consider a monopolistically competitive firm in a market in long-run equilibrium.This firm is likely earning

Correct Answer
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Table 16-5 This table shows the demand schedule,marginal cost,and average total cost for a monopolistically competitive firm. -Refer to Table 16-5.Which of the following statements regarding this monopolistically competitive firm is correct?

Correct Answer
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Brand names are rarely used to convey information about product quality.

Correct Answer
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When McDonald's opens a store in Dhaka,Bangladesh,it has a strong incentive to enforce product quality consistent with stores in the United States.

Correct Answer
verified

If regulators required firms in monopolistically competitive markets to set price equal to marginal cost,

Correct Answer
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Which of the following statements is not correct?

Correct Answer
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A firm can earn economic profits in the short run

Correct Answer
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Which of the following statements is not correct?

Correct Answer
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Table 16-3 The following table shows the output produced by each of the top eight firms in four industries as well as the total industry output for those industries. -Refer to Table 16-3.Which industry has the highest concentration ratio?

Correct Answer
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In monopolistically competitive markets,positive economic profits

Correct Answer
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Figure 16-6 -Refer to Figure 16-6.If a firm in a monopolistically competitive market was producing the level of output depicted as Q_d in panel (d) ,it would

Correct Answer
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When a profit-maximizing firm in a monopolistically competitive market charges a price higher than marginal cost,

Correct Answer
verified

Exam 16: Monopolistic Competition

Advertising during the Super Bowl is an example of information about quality contained primarily in the existence and expense of the advertising.

Correct AnswerverifiedShow Answer

Figure 16-2 -Refer to Figure 16-2.What,if any,long run adjustment will occur in this industry?

Correct Answerverifiedfirms will enterpri...View AnswerShow Answer

Policymakers have generally come to accept the view that advertising enhances the efficiency of markets.

Correct AnswerverifiedShow Answer

When a monopolistically competitive firm is in long-run equilibrium,

Correct AnswerverifiedShow Answer

In a monopolistically competitive market,

Correct AnswerverifiedShow Answer

A monopolistically competitive firm chooses its

Correct AnswerverifiedShow Answer

Figure 16-2 This figure depicts a situation in a monopolistically competitive market. -Refer to Figure 16-2.How much profit will the monopolistically competitive firm earn in this situation?

Correct AnswerverifiedShow Answer

Correct Answerverified The arrival of a new entrant should be ...View AnswerShow Answer

Consider a monopolistically competitive firm in a market in long-run equilibrium.This firm is likely earning

Correct AnswerverifiedShow Answer

Table 16-5 This table shows the demand schedule,marginal cost,and average total cost for a monopolistically competitive firm. -Refer to Table 16-5.Which of the following statements regarding this monopolistically competitive firm is correct?

Correct AnswerverifiedShow Answer

Brand names are rarely used to convey information about product quality.

Correct AnswerverifiedShow Answer

When McDonald's opens a store in Dhaka,Bangladesh,it has a strong incentive to enforce product quality consistent with stores in the United States.

Correct AnswerverifiedShow Answer

If regulators required firms in monopolistically competitive markets to set price equal to marginal cost,

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

A firm can earn economic profits in the short run

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Table 16-3 The following table shows the output produced by each of the top eight firms in four industries as well as the total industry output for those industries. -Refer to Table 16-3.Which industry has the highest concentration ratio?

Correct AnswerverifiedShow Answer

In monopolistically competitive markets,positive economic profits

Correct AnswerverifiedShow Answer

Figure 16-6 -Refer to Figure 16-6.If a firm in a monopolistically competitive market was producing the level of output depicted as Qd in panel (d) ,it would

Correct AnswerverifiedShow Answer

When a profit-maximizing firm in a monopolistically competitive market charges a price higher than marginal cost,

Correct AnswerverifiedShow Answer

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firms will enter
pri...
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The arrival of a new entrant should be ...
View Answer

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Figure 16-6 -Refer to Figure 16-6.If a firm in a monopolistically competitive market was producing the level of output depicted as Q_d in panel (d) ,it would

Correct Answer
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Correct Answer
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