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

When a monopolistically competitive firm cuts its price to increase its sales, it experiences a loss in revenue due to the

If buyers of a monopolistically competitive product feel the products of different sellers have little differences between them, then the demand for each seller's product is relatively elastic.

Economists have long debated whether there is a significant loss of well-being to society in markets that are monopolistically competitive rather than perfectly competitive. Which of the following offers the best reason why some economists believe that monopolistically competitive markets benefit consumers despite any loss of well-being?

Figure 13-7 Figure 13-7 shows short-run cost and demand curves for a monopolistically competitive firm in the footwear market. -Refer to Figure 13-7. Which of the following is the area that represents the profit or loss experienced by the firm?

Figure 13-13 -Refer to Figure 13-13. What is the area that represents the firm's total cost?

One goal a firm tries to achieve when it advertises a product is to

If the price exceeds the average variable cost but is less than the average total cost, a firm

The reason that the "fast-casual" restaurant market is monopolistically competitive rather than perfectly competitive is because

Which of the following is not a characteristic of a monopolistically competitive firm in long-run equilibrium?

If a perfectly competitive firm maximizes short-run profits, its marginal revenue will be positive and less than its price.

Economists agree that a monopolistically competitive market structure

Which of the following statements is true?

The marketing of the first ballpoint pen by Milton Reynolds showed

Does the fact that monopolistically competitive firms do not achieve productive efficiency or allocative efficiency mean that there is a significant loss in consumer welfare?

Excess capacity is a characteristic of monopolistically competitive firms. What does excess capacity mean?

Figure 13-7 Figure 13-7 shows short-run cost and demand curves for a monopolistically competitive firm in the footwear market. -Refer to Figure 13-7. Which of the following statements describes the best course of action for the firm depicted in the diagram?

Table 13-5 Table 13-5 shows the demand and cost data facing a monopolistically competitive producer of canvas bags. -Refer to Table 13-5. At the profit-maximizing or loss-minimizing output level

Figure 13-13 -Refer to Figure 13-13. If the diagram represents a typical firm in the market, what is likely to happen in the long run?

Unlike a perfectly competitive firm, a monopolistic competitor does not have a short-run shut-down point.

One of your classmates asserts that advertising, marketing research, and brand management are redundant expenditures because a firm can obtain the same information by simply looking at what customers are already buying. Which of the following is not a response you might offer her?