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

The ability to engage in product differentiation is one of the factors a manager or owner of a firm can control in order to create value for consumers.

Consumers benefit from monopolistic competition by

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

You have just opened a new Italian restaurant in your hometown where there are three other Italian restaurants. Your restaurant is doing a brisk business and you attribute your success to your distinctive northern Italian cuisine using locally grown organic produce. What is likely to happen to your business in the long run?

-Refer to Figure 10-12. What is the monopolistic competitor's profit-maximising price?

Is a monopolistically competitive firm allocatively efficient?

What is meant by 'excess capacity'? How does it relate to consumer utility?

-Refer to Table 10-4. Based on the data in the table, which of the following statements is true?

The Jeans Store sells 7 pairs of jeans per day when it charges $100 per pair. It sells 8 pairs of jeans per day at a price of $90 per pair. The marginal revenue of the eighth pair of jeans is

A firm cannot control all of the factors that allow it to make economic profits. Which of the following is an example of an uncontrollable factor?

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.

If the demand curve for a firm is downward sloping, its marginal revenue curve

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

For a monopolistically competitive firm, marginal revenue

After selling 1000 three-ring binders, Tony DiFulvio realises that the marginal revenue from selling the last binder was less than the marginal cost. From this we can conclude that

Marketing refers to all the activities necessary for a firm to sell a product to a consumer.

A monopolistically competitive firm can convince buyers that its product has value by differentiating its product to suit consumers' preferences.

Draw a graph that shows the impact on a firm's profit when it increases spending on advertising and the increased advertising has no effect on the demand for a firm's product.

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

Advertising is the action of a firm that is intended to maintain the differentiation of its product over time.