Exam 10: Monopolistic Competition

If marginal revenue is negative,then the revenue lost from receiving a lower price on all the units that could have been sold at the original price is smaller than the additional revenue from selling one more unit of the good.

A monopolistically competitive industry that earns economic profits in the short run will face a more elastic demand curve in the long run.

For the monopolistically competitive firm

Figure 10-17 -Refer to Figure 10-17.What is the amount of excess capacity?

Table 10-2 Eco Energy is a monopolistically competitive producer of a sports beverage called Power On.Table 10-2 shows the firm's demand and cost schedules. -Refer to Table 10-2.What is Eco Energy's profit?

Figure 10-4 Figure 10-4 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches. -Refer to Figure 10-4.Should the firm represented in the diagram continue to stay in business despite its losses?

Although advertising raises the price of a monopolistic competitor's product,it does confer a benefit to consumers.Which of the following is a benefit to consumers?

Figure 10-14 -Refer to Figure 10-14.What is the output price?

Which of the following is a disadvantage of trademarking a firm's product?

If a monopolistically competitive firm breaks even,the firm is earning as much in this industry as it could in any other comparable industry.

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

Economists believe that consumers would be better off if markets were perfectly competitive rather than monopolistically competitive.

Unlike a perfectly competitive firm,for a monopolistically competitive firm

A monopolistically competitive firm earning profits in the short run will find the demand for its product decreasing and becoming more elastic in the long run as new firms move into the industry until

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

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

Complete the following table.

A trademark is

Table 10-1 -Refer to Table 10-1.The table shows

Figure 10-11 -Refer to Figure 10-11.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 maximising profits at a quantity of 100 000 per month and identify the area on the graph which represents the profit.