Exam 13: Monopolistic Competition: the Competitive Model in a More Realistic Setting

In the long-run equilibrium, both the perfectly competitive firm and the monopolistically competitive firm produce the output at which MR=MC and charge a price equal to the average total cost of production.

Table 13-3 Table 13-3 shows the demand and cost schedules for a monopolistically competitive firm. -Refer to Table 13-3. What are the profit-maximizing/loss-minimizing output level and price?

Table 13-3 Table 13-3 shows the demand and cost schedules for a monopolistically competitive firm. -Refer to Table 13-3. What is the best course of action for the firm in the short run?

Table 13-2 Eco Energy is a monopolistically competitive producer of a sports beverage called Power On. Table 13-2 shows the firm's demand and cost schedules. -Refer to Table 13-2. How much additional profit will be made if the firm chooses to produce and sell 5 cases instead of 4 cases?

For allocative efficiency to hold

Figure 13-12 Figure 13-12 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches. -Refer to Figure 13-12. If the diagram represents a typical firm in the designer watch market, what is likely to happen in the long run?

When a credit card company offers different services with its card, like travel insurance for air travel tickets purchased with the credit card or product insurance for items purchased with the card, the credit card company is trying to

Figure 13-11 -Refer to Figure 13-11. The firm represented in the diagram

Arturo runs a Taco Bell franchise. He is selling 250 Gordita Supremes per week at a price of $2.75. If he lowers the price to $2.70, he will sell 251 Gordita Supremes. What is the marginal revenue of the 251st Gordita Supreme? If selling the extra Gordita Supreme adds $0.20 to Arturo's costs, what will be the effect on his profit from selling 251 Gordita Supremes instead of 250?

Every firm that has the ability to affect the price of the good or service it sells will

Of the factors that are within the control of the firms owners, the most important factors that make a firm successful are

Table 13-1 -Refer to Table 13-1. The Table shows

Nike has used Michael Jordan to create the impression that Air Jordan basketball shoes are superior to any other basketball shoes. Nike is attempting to

A monopolistically competitive firm can convince buyers that its product has value by differentiating its product to suit consumers' preferences.

For a monopolistically competitive firm, price equals average revenue.

Monopolistically competitive firms have downward-sloping demand curves. In the long run, monopolistically competitive firms earn zero economic profits. These two characteristics imply that in the long run

Which of the following is an example of a factor that a firm's owners and managers can control in making the firm successful?

A monopolistically competitive firm will

Consumers in a monopolistically competitive market do not receive any consumer surplus because the price paid for the product exceeds the marginal cost of production.

A successful trademark is one that becomes a generic name for a product, for example, "Kleenex" has become a generic term for tissues.