Exam 15: Monopolistic Competition and Product Differentiation

Use the following to answer questions: Figure: Firms in Monopolistic Competition -(Figure: Firms in Monopolistic Competition) In panel (C) of the figure Firms in Monopolistic Competition, economic loss per unit is:

Use the following to answer questions: Figure: Profit Maximization in Monopolistic Competition -(Figure: Profit Maximization in Monopolistic Competition) Look at the figure Profit Maximization in Monopolistic Competition. In monopolistic competition, long-run equilibrium is characterized by:

Monopolistic competition in an industry will result in _____ because firms produce _____.

The hamburger industry has some differentiation and many firms. This suggests that the hamburger industry is more oligopolistic than monopolistically competitive.

Use the following to answer questions: Figure: Profits in Monopolistic Competition -(Figure: Profits in Monopolistic Competition) Look at the figure Profits in Monopolistic Competition. A zero economic profit is earned if the profit-maximizing price is _____ in panel _____.

In contrast to perfect competition, in monopolistic competition:

Monopolistically competitive firms have zero economic profits in the long run because of:

Short-run equilibrium in monopolistic competition and differs from that of monopoly because the monopolistic competitor can make losses in the short run, while in a monopoly, profits will always be zero or positive.

When a monopolistically competitive firm is making zero economic profits, it is producing so that the average total cost curve is tangent to the demand curve. At this output:

Economics textbooks are an example of product differentiation by type and style.

Use the following to answer questions: Figure: Monopolistic Competition V -(Figure: Monopolistic Competition V) In the figure Monopolistic Competition V, in the long run firms will:

Defenders of advertising argue that it:

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.

Monopolistically competitive firms produce less than the output at which average total cost is minimized in the long run. As a result, there is:

Both monopolists and monopolistic competitors:

Use the following to answer questions: Figure: Monopolistic Competition VI -(Figure: Monopolistic Competition VI) In the figure Monopolistic Competition VI, in the long run firms will:

Use the following to answer questions: Figure: Monopolistic Competition III -(Figure: Monopolistic Competition III) The figure Monopolistic Competition III shows the demand, marginal revenue, marginal cost, and average total cost curves for Pat's Pizza Parlor, a monopolistic competitor in the food-to-go industry. In the long run, the demand curve for Pat's Pizza Parlor will shift to the _____ as competitors _____ the market.

Use the following to answer questions: Figure: Profit Maximization in Monopolistic Competition -(Figure: Profit Maximization in Monopolistic Competition) In the short run, a firm in monopolistic competition may earn economic profits. The profits in the figure Profit Maximization in Monopolistic Competition, panel (A), are:

Use the following to answer question: Figure: Monopolistic Competitor -(Figure: Monopolistic Competitor) If the firm shown in the figure Monopolistic Competitor maximizes its returns, it will:

Which of the following advertising slogans provides information to potential buyers?