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

Figure 13-11 -Refer to Figure 13-11. What is the productively efficient output for the firm represented in the diagram?

When a monopolistically competitive firm cuts its price to increase its sales, it experiences a gain in revenue due to the

According to a Wall Street Journal article, hhgregg has differentiated itself from its competition, particularly from large chain stores such as Best Buy,

A monopolistically competitive industry that earns economic profits in the short run will be able to expand its market share even if the market size remains constant.

Central Grocery in New Orleans is famous for its muffaletta, a large round sandwich filled with deli meats and topped with a tangy olive salad. Suppose the following table represents cost and revenue data for Central Grocery. Illustrate this data by graphing the demand, MR, MC, and ATC curves. Identify the profit-maximizing price and quantity, and show the area representing the total profit received by Central Grocery.

Long-run equilibrium in a monopolistically competitive market is similar to long-run equilibrium in a perfectly competitive market in that in both markets, firms

Figure 13-11 -Refer to Figure 13-11. What is the monopolistic competitor's profit-maximizing output?

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. At Victoria's profit-maximizing output,

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

Table 13-3 Table 13-3 shows the demand and cost schedules for a monopolistically competitive firm. -Refer to Table 13-3. What is the best course of action for the firm in the short run?

Figure 13-17 -Refer to Figure 13-17. What is the amount of excess capacity?

A monopolistically competitive firm is producing an output level where marginal revenue is greater than marginal cost. What should this firm do to increase its profit or reduce its losses?

Monopolistically competitive firms achieve allocative efficiency but not productive efficiency.

In the short run, a profit-maximizing firm's decision to produce should be guided by whether

Figure 13-15 -Refer to Figure 13-15 to answer the following questions. a. What is the profit-maximizing output level? b. What is the profit-maximizing price? c. What is the average total cost at the profit-maximizing output level? d. What area represents the firm's profit? e. At which output level are economies of scale exhausted? f. Does this graph most likely represent the long run or the short run? Why?

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

How does the long-run equilibrium of a monopolistically competitive industry differ from that of a perfectly competitive industry?

Figure 13-7 Figure 13-7 shows short-run cost and demand curves for a monopolistically competitive firm in the footwear market. -Refer to Figure 13-7. Which of the following statements describes the best course of action for the firm depicted in the diagram?

A franchise is

Figure 13-13 -Refer to Figure 13-13. What is the profit maximizing output level?