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

Figure 13-8 Figure 13-8 shows cost and demand curves for a monopolistically competitive producer of iced-tea. -Refer to Figure 13-8. What is the firm's profit-maximizing price?

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 is the area that represents the profit or loss experienced by the firm?

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

Which of the following is not a characteristic of monopolistic competition?

The profit-maximizing rule for a monopolistically competitive firm is to select the quantity at which

To maximize their profits and defend those profits from competitors, monopolistically competitive firms must

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

Marketing refers to all the activities necessary for a firm to sell a product to a consumer.

Assume price exceeds average variable cost over the relevant range of demand. If a monopolistically competitive firm is producing at an output where marginal revenue is $23 and marginal cost is $19, then to maximize profits the firm should

Tony's Italian Ice is a monopolistically competitive firm. If Tony's earns a profit in the short run, which of the following is most likely to occur?

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 loss made by the firm?

Because the monopolistically competitive firm faces a ________ demand curve for its product, it ________ the price of its output.

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

If a firm faces a downward-sloping demand curve,

________ describes the actions a firm takes to maintain the differentiation of its product over time.

Table 13-5 Table 13-5 shows the demand and cost data facing a monopolistically competitive producer of canvas bags. -Refer to Table 13-5. What are the firm's profit-maximizing or loss-minimizing price and quantity?

Discuss the role of product differentiation and advertising in monopolistic competition.

Figure 13-13 -Refer to Figure 13-13. If the diagram represents a typical firm in the market, what is likely to happen to its average cost of production in the long run?

When a monopolistically competitive firm cuts its price to increase its sales, it experiences a loss in revenue due to the income effect and a gain in revenue due to the substitution effect.

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