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

Table 13-3 Table 13-3 shows the demand and cost schedules for a monopolistically competitive firm. -Refer to Table 13-3.What is its average variable cost of production at its optimal output level?

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

If a firm has excess capacity,it means

In monopolistic competition,if a firm produces a highly desirable product relative to its competitors,the firm will be able to raise its price without losing any customers.

Figure 13-10 -Refer to Figure 13-10.In the long run,why will the firm produce Qf units and not Qg units,which has a lower its average cost of production?

Long-run equilibrium under monopolistic competition is similar to that under perfect competition in that

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

Which of the following statements is true about advertising by a monopolistically competitive firm?

Figure 13-3 Figure 13-3 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches. -Refer to Figure 13-3.What is the area that represents the loss made by the firm?

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.

Figure 13-3 Figure 13-3 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches. -Refer to Figure 13-3.What is the area that represents the total variable cost of production?

Table 13-1 -Refer to Table 13-1.The Table shows

Figure 13-3 Figure 13-3 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches. -Refer to Figure 13-3.What is the area that represents the total revenue made by the firm?

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

If buyers of a monopolistically competitive product feel the products of different sellers have little differences between them,then the demand for each seller's product is relatively elastic.

Figure 13-6 -Refer to Figure 13-6.What is the allocatively efficient output for the firm represented in the diagram?

In the long run,if price is less than average cost,

If the demand curve for a firm is downward-sloping,its marginal revenue curve

The financial situation at Starbucks in the late 2000s illustrates the fact that maintaining long-run profits in a monopolistically competitive market is

For productive efficiency to hold,