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

Explain the similarities and differences between the long-run equilibrium for a perfectly competitive firm and a monopolistically competitive firm.Illustrate your answer with a graph demonstrating the long run equilibrium for the two types of firms.

Table 13-1 Table 13-1 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 13-1.Victoria's profit-maximizing quantity sold (Q)and price (P)are:

Table 13-2 Table 13-2 shows the demand and cost data facing a monopolistically competitive producer of canvas bags. -Refer to Table 13-2.At the profit-maximizing or loss-minimizing output level

When a monopolistically competitive firm lowers it price one bad thing happens to the firm.What is this "one bad thing" called?

Figure 13-5 -Refer to Figure 13-5.Which of the graphs in the figure depicts a monopolistically competitive firm that is minimizing its losses?

Figure 13-4 Figure 13-4 shows cost and demand curves for a monopolistically competitive producer of iced-tea. -Refer to Figure 13-4.What is the profit-maximizing output level?

Figure 13-3 Figure 13-3 shows short-run cost and demand curves for a monopolistically competitive firm in the footwear market. -Refer to Figure 13-3.Which of the following is the area that represents the profit or loss experienced by the firm?

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

A monopolistically competitive firm that is profitable in the short run will face competition that will eventually eliminate the firm's profits in the long run.But the firm can stave off competition and continue to earn economic profits if

The economic analysis of monopolistic competition shows that market forces eliminate profits in the long run.However,it is possible for a firm to continue to earn economic profits if the firm

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

In San Francisco there are many restaurants that specialize in a wide variety of cuisines.Patronage at these restaurants is influenced by factors such as tastes,price and location.This market is

A monopolistically competitive firm should lower its price if its marginal revenue exceeds its marginal cost.

Why are demand and marginal revenue represented by the same curve for a firm in a perfectly competitive market,but by separate curves for a firm in a monopolistically competitive market?

Firms in monopolistic competition compete by selling similar,but not identical products.

Figure 13-5 -Refer to Figure 13-5.Which of the graphs in the figure depicts a monopolistically competitive firm that is earning economic profits?

In the United States,the average person mostly patronizes firms that operate in

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?

What is the trade-off that consumers face when buying the product of a monopolistically competitive firm?

If some monopolistically competitive firms exit their market after suffering short-run losses,the demand curves of remaining firms will shift to the right.