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

Suppose a monopolistically competitive firm's output where marginal revenue equals marginal cost is 66 units and the price corresponding to this quantity is $18. If the average total cost at this output is $16.55, then its total profit is

Figure 13-13 -Refer to Figure 13-13. What is the area that represents the firm's profit?

Figure 13-4 Figure 13-4 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches. -Refer to Figure 13-4. What is the area that represents the total variable cost of production?

Table 13-3 Table 13-3 shows the demand and cost schedules for a monopolistically competitive firm. -Refer to Table 13-3. What are the profit-maximizing/loss-minimizing output level and price?

Which of the following statements is true?

For a monopolistically competitive firm, price equals average revenue.

The key characteristics of a monopolistically competitive market structure include

When a credit card company offers different services with its card, like travel insurance for air travel tickets purchased with the credit card or product insurance for items purchased with the card, the credit card company is trying to

The most important of the factors that make a firm successful and that can be controlled by the firm's owners and managers are

Figure 13-6 -Refer to Figure 13-6. Suppose Dell finds the relationship between the average total cost of producing notebook computers and the quantity of notebook computers produced is as shown by Figure 13-2. Dell will maximize profits if it produces ________ notebook computers per month.

Table 13-3 Table 13-3 shows the demand and cost schedules for a monopolistically competitive firm. -Refer to Table 13-3. If this firm continues to produce, what is likely to happen to the product's price in the long run?

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.

Excess capacity is a characteristic of monopolistically competitive firms. What does excess capacity mean?

If a significant number of smokers switch from smoking tobacco cigarettes to e-cigarettes, a company like NJOY will likely find its demand curve shifting to the ________ and its marginal revenue curve shifting to the ________ as more competitors enter the market.

One way by which firms differentiate their products is to find a market niche.

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

One goal a firm tries to achieve when it advertises a product is to

For productive efficiency to hold,

Figure 13-14 Figure 13-14 illustrates a monopolistically competitive firm. -Refer to Figure 13-14. Which of the following statements describes the firm depicted in the diagram?

Consumers in a monopolistically competitive market do not receive any consumer surplus because the price paid for the product exceeds the marginal cost of production.