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

Nike has used Michael Jordan to create the impression that Air Jordan basketball shoes are superior to any other basketball shoes. Nike is attempting to

Table 13-4 Table 13-4 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 13-4. Victoria's profit-maximizing output is where

Suppose electronic cigarette manufacturer NJOY is successful in establishing a profitable market for e-cigarettes in what is a monopolistically competitive industry. In the long run, NJOY will most likely find it ________ to remain profitable as they face ________ competition in the e-cigarette market.

Unlike a perfectly competitive firm, for a monopolistically competitive firm

Table 13-2 Eco Energy is a monopolistically competitive producer of a sports beverage called Power On. Table 13-2 shows the firm's demand and cost schedules. -Refer to Table 13-2. What is likely to happen to the product's price in the long run?

In the long run, if the demand curve of a monopolistically competitive firm is tangent to its average total cost curve, then

If a monopolistically competitive firm has excess capacity,

In monopolistic competition there is/are

Sparkle, one of many firms in the market for toothpaste, is in long-run equilibrium. Sparkle has a small market share and has been in business for a long time. a. Identify the market structure in which Sparkle operates. Explain your answer. b. What is Sparkle's profit or loss? Explain your answer. If you cannot determine the profit or loss, explain what information is missing. c. Draw a diagram showing Sparkle's demand curve, marginal revenue curve, average total cost curve and marginal cost curve. Label your diagram.

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

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

Firms use two marketing tools to differentiate their products. What are these two tools?

If a firm can produce a product at a lower average cost than its competitors, it stands a better chance of earning economic profit.

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

Figure 13-10 Figure 13-10 shows cost and demand curves for a monopolistically competitive producer of iced-tea. -Refer to Figure 13-10 to answer the following questions. a. What is the profit-maximizing output level? b. What is the profit-maximizing price? c. At the profit-maximizing output level, how much profit will be realized? d. Does this graph most likely represent the long run or the short run? Why?

One reason Starbucks experienced a decline in sales in the late 2000s is because

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.

Economists agree that a monopolistically competitive market structure

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?

If a perfectly competitive firm maximizes short-run profits, its marginal revenue will be positive and less than its price.