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

Figure 13-4 Figure 13-4 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches. -Refer to Figure 13-4.If the firm represented in the diagram is currently producing and selling Qₐ units, what is the price charged?

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

Which of the following is true for a monopolistically competitive firm in long-run equilibrium?

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.What are the firm's profit-maximizing or loss-minimizing price and quantity?

Figure 13-6 -Refer to Figure 13-6.Suppose the above graph represents the relationship between the average total cost of producing notebook computers and the quantity of notebook computers produced by Dell.On a graph, illustrate the demand, MR, MC, and ATC curves which would represent Dell maximizing profits at a quantity of 100,000 per month and identify the area on the graph which represents the profit.

Which of the following statements is true about advertising by a monopolistically competitive firm?

A firm that is first to the market with a new product frequently discovers that there are design flaws or problems with the product that were not anticipated.How do these problems affect the innovating firm?

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

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

Why do most firms in monopolistic competition typically make zero profit in the long run?

You are planning to open a new Italian restaurant in your hometown where there are three other Italian restaurants.You plan to distinguish your restaurant from your competitors by offering northern Italian cuisine and using locally grown organic produce.What is likely to happen in the restaurant market in your hometown after you open?

Which of the following statements is true?

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?

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?

If buyers of a monopolistically competitive product feel the products of different sellers are strongly differentiated, then the demand for each seller's product is

One of the assumptions of monopolistic competition is that firms produce differentiated products.What does this assumption imply about the demand curve facing a representative firm?

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

What is the difference between the terms "marketing" and "advertising"?

In long-run equilibrium, compared to a perfectly competitive market, a monopolistically competitive industry produces a ________ level of output and charges a ________ price.

A monopolistically competitive firm maximizes profit in the short run by producing where