Exam 13: Monopolistic Competition: the Competitive Model in a

Tony's Italian Ice is a monopolistically competitive firm.If Tony's earns a profit in the short run, which of the following is most likely to occur?

In the long run, if price is less than average cost

Table 13-1 -Refer to Table 13-1.What portion of the marginal revenue of the 5th unit is due to the output effect and what portion is due to the price effect?

Being the first to sell a particular good can give a firm advantages over other firms that sell similar products.What is the name given to these advantages?

Table 13-1 -Refer to Table 13-1.What portion of the marginal revenue of the 4th unit is due to the output effect and what portion is due to the price effect?

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

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

Figure 13-19 -Refer to Figure 13-19 to answer the following questions. a.What is the productively efficient output? b.What is the allocatively efficient output? c.What is the amount of excess capacity? d.Suppose the firm is currently producing 14 units.What happens if it increases output to 17 units?

In 2011, Red Robin announced that it would open 12 fast-casual restaurants, and in 2016 the company decided to abandon the fast-casual restaurant business.Which of the following reasons relating to the characteristics of monopolistic competition did the company give for getting out of the fast-casual restaurant business?

When a monopolistically competitive firm lowers its price, one good thing happens to the firm.What is this "one good thing" called?

If Panera Bread's "clean food" strategy succeeds and customers are willing to pay higher prices for their menu items, the company will

Figure 13-17 -Refer to Figure 13-17.What is the allocatively efficient output for the firm represented in the diagram?

Figure 13-10 Figure 13-10 shows cost and demand curves for a monopolistically competitive producer of iced tea. -Refer to Figure 13-10.to answer the following questions. a.What is the profit-maximizing output level? b.What is the profit-maximizing price? c.At the profit-maximizing output level, how much profit will be realized? d.Does this graph most likely represent the long run or the short run? Why?

How does the long-run equilibrium of a monopolistically competitive industry differ from that of a perfectly competitive industry?

Most economists believe that consumers would be better off if markets were perfectly competitive rather than monopolistically competitive.

Which of the following would not occur as a result of a monopolistically competitive firm suffering a short-run economic loss?

The marginal revenue of a monopolistically competitive firm

Figure 13-3 -Refer to Figure 13-3.What is the marginal revenue of the sixth unit of output?

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?

In what way does long-run equilibrium under monopolistic competition differ from long-run equilibrium under perfect competition?