Exam 15: Monopolistic Competition and Product Differentiation

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.In panel (A)of the figure,if the firm raises its price above P,it will _____ customers.

In the long run,if a monopolistically competitive firm produces the optimal level of output:

Use the following to answer question: Figure: Profits in Monopolistic Competition -(Figure: Profits in Monopolistic Competition)Use Figure: Profits in Monopolistic Competition.A positive economic profit is earned if the profit-maximizing price is _____ in panel _____.

The price in long-run equilibrium for a monopolistically competitive firm is _____ and output is _____,compared with that of a perfectly competitive firm with an identical production function and cost curves.

Use the following to answer question: Figure: Firms in Monopolistic Competition -(Figure: Firms in Monopolistic Competition)Use Figure: Firms in Monopolistic Competition.In panel (B)of the figure,the profit-maximizing quantity of output is determined by the intersection at point:

The profit-maximizing rule,expressed as _____,is adhered to by firms operating in _____ markets.

(Figure: Monopolistic Competition)Use Figure: Monopolistic Competition.The firm in the figure is producing at the output level that maximizes profits (minimizes losses).The shaded rectangle depicts the level of: Figure: Monopolistic Competition

Since a monopolistically competitive firm faces a downward-sloping demand curve,its price will be _____ revenue.

An industry characterized by many competitors,each producing identical products,with free entry and exit,is described as:

Use the following to answer question: Figure: Firms in Monopolistic Competition -(Figure: Firms in Monopolistic Competition)Use Figure: Firms in Monopolistic Competition.In panel (C)of the figure,economic loss per unit is the vertical distance between points:

The conditions for profit maximization and the analysis of short-run equilibrium are identical for monopoly and for a monopolistically competitive firm.

Monopolistically competitive firms:

Among the drawbacks of brand names is the fact that they:

In many cities you,can stay at a Holiday Inn in the downtown area,in a suburban community,or near the airport.These Holiday Inn establishments are examples of product differentiation by:

A monopolistically competitive industry,such as corn snack chips,and a perfectly competitive industry,like wheat farming,are alike in that:

In monopolistic competition,each firm:

If a firm operating in monopolistic competition is producing a quantity that generates MC > MR,then the marginal decision rule tells us that profit:

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

Firm A and firm B have identical cost curves and operate in markets with similar market demand curves.Firm A operates in perfect competition,and firm B operates in monopolistic competition.In the long run,firm A will charge _____ and produce _____ than will firm B.

In long-run equilibrium in monopolistic competition,price is: