Exam 10: Monopolistic Competition: The Competitive Model in a More Realistic

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

In the highly competitive fast-food restaurant market, brand name restaurants have a strong profit incentive to maintain high sanitary conditions and avoid any negative consequences.

Figure 10.14 -Refer to Figure 10.14.The profit-maximising output level is

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 are less efficient than perfectly competitive markets?

A monopolistically competitive firm faces a downward-sloping demand curve because

A monopolistically competitive firm can increase its profits beyond the long-run equilibrium break-even level by deliberately lowering its price to force some of its competitors out of the market.

A firm that successfully differentiates its product or lowers its average cost of production creates

Is a monopolistically competitive firm productively efficient?

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?

There are many cattle ranchers in the world, and there are also many McDonald's restaurants in the world.Why, then, does a McDonald's restaurant face a downward-sloping demand curve while a cattle rancher faces a horizontal demand curve? __________________________________________________________________________________________________________________________________________________________________________________________

A monopolistic competitor does not earn profits in the long run unless it can successfully differentiate its product in the minds of its consumers.

How might a monopolistically competitive firm continually earn economic profit greater than zero? __________________________________________________________________________________________________________________________________________________________________________________________

What are the key factors that determine the profitability of a firm in a monopolistically competitive market? __________________________________________________________________________________________________________________________________________________________________________________________

Table 10.3 Table 10.3 shows the demand and cost schedules for a monopolistically competitive firm. -Refer to Table 10.3.What is the best course of action for the firm in the short run?

Monopolistic competition is a market structure in which

Which of the following will not happen as a consequence of a monopolistically competitive firm suffering economic losses in the short run?

The most important of the factors that make a firm successful and that can be controlled by the firm's owners and managers are

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?

If firms in a monopolistically competitive industry are making profits in the short run,

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