Exam 15: Monopolistic Competition and Product Differentiation

The failure to produce enough to minimize average total cost is termed:

Perfect competitors and monopolistic competitors both earn _____ economic profit in the long run,but perfect competitors produce at the _____ of the ATC curve,while monopolistic competitors produce _____ of the ATC curve.

Both monopolists and monopolistic competitors:

In the long run,monopolistic competitors will:

For the monopolistically competitive wild-caught seafood market,the demand curve for any individual firm is _____,and there are _____ producers of seafood.

Excess capacity is a problem in monopolistic competition because,if there were fewer firms in the industry:

The profit-maximizing rule MC = MR is followed by firms operating in:

Use the following to answer question: Figure: The Restaurant Market -(Figure: The Restaurant Market)Use Figure: The Restaurant Market.The figure shows curves facing a typical restaurant.Assume that many firms,differentiated products,and easy entry and exit characterize the restaurant market.For the restaurant shown here,the profit-maximizing price is:

General Snacks is a typical firm in a market characterized by monopolistic competition.Initially,the market is in long-run equilibrium,and then there is an increase in the market demand for snacks.In the short run the price of snacks will _____ and the market output of snacks will _____.

Toby operates a small deli downtown.The deli industry is monopolistically competitive.In the long run,Toby will produce where:

If the toothpaste market is monopolistically competitive,product differentiation would NOT take the form of:

Use the following to answer question: Figure: Monopolistic Competitor -(Figure: Monopolistic Competitor)Use Figure: Monopolistic Competitor.The firm shown in the figure may engage in advertising because:

If a firm operating in monopolistic competition is producing a quantity at which MC < MR,then profit can be _____ by _____.

The model of monopolistic competition characterizes the market for plumbing services.This market is initially in long-run equilibrium,but then there is an increase in the market demand for plumbing services.We expect that in the long run,the economic profits of typical firms will be:

Toby operates a small deli in a monopolistically competitive restaurant industry.In long-run equilibrium,the profit-maximizing price of the three-meat sandwich is $3.Price also equals his average total cost.Toby's minimum average total cost is less than $3.

Suppose a monopolistically competitive firm is making a profit,but it can increase its profits by increasing output.At the current level of output:

Which statement is TRUE of firms in both perfect competition and monopolistic competition?

Use the following to answer question: Figure: Monopolistic Competition II -(Figure: Monopolistic Competition II)Use Figure: Monopolistic Competition II.Panel(s)_____ in the figure show(s)a monopolistic competitor earning a loss in the short run.

Use the following to answer question: Figure: Profit Maximization in Monopolistic Competition -(Figure: Profit Maximization in Monopolistic Competition)Use Figure: Profit Maximization in Monopolistic Competition.If other firms see economic profits in the industry,they will enter it,and the demand curve for firms already in the industry will shift to the _____;in the long run,this will result in an economic profit _____ zero and a price _____ ATC.

Because most communities have a large number of similar but not identical substitutes,the market for florists is BEST considered to be: