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

One reason why the "fast-casual" restaurant market is competitive is that

Table 13-4 Table 13-4 lists estimated revenues and costs (per week)for plastic vials (100 vials per box)for the Victoria Biological Supplies Company.Victoria sells plastic vials to university and private research laboratories. -Refer to Table 13-4.Based on the data in the table, which of the following statements is true?

Table 13-3 Table 13-3 shows the demand and cost schedules for a monopolistically competitive firm. -Refer to Table 13-3.What is its average variable cost of production at its optimal output level?

Which of the following can a firm use to defend a successful product's brand name?

What effect does the entry of new firms in a monopolistically competitive market have on the economic profits of existing firms in the market? How might existing firms attempt to counteract this effect?

Figure 13-8 Figure 13-8 shows cost and demand curves for a monopolistically competitive producer of iced tea. -Refer to Figure 13-8.What is the firm's profit-maximizing price?

Some factors that allow firms to make economic profits are beyond its control.All but one of the following is an uncontrollable factor.Which factor is controllable?

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?

For productive efficiency to hold

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

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

Long-run equilibrium in a monopolistically competitive market is similar to long-run equilibrium in a perfectly competitive market in that in both markets, firms

Figure 13-15 -Refer to Figure 13-15 to answer the following questions. a.What is the profit-maximizing output level? b.What is the profit-maximizing price? c.What is the average total cost at the profit-maximizing output level? d.What area represents the firm's profit? e.At which output level are economies of scale exhausted? f.Does this graph most likely represent the long run or the short run? Why?

In monopolistic competition, if a firm produces a highly desirable product relative to its competitors, the firm will be able to raise its price without losing any customers.

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

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.What is the output (Q)that maximizes profit and what is the price (P)charged?

In contrast with perfect competition, excess capacity characterizes monopolistic competition.Excess capacity is due to which of the following?

Because the monopolistically competitive firm faces a ________ demand curve for its product, it ________ the price of its output.

Figure 13-6 -Refer to Figure 13-6.Suppose Dell finds the relationship between the average total cost of producing notebook computers and the quantity of notebook computers produced is as shown by Figure 13-2.Dell will maximize profits if it produces ________ notebook computers per month.

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