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

In the long run,what happens to the demand curve facing a monopolistically competitive firm that is earning short-run profits?

Table 13-1 -Refer to Table 13-1.What portion of the marginal revenue of the 4th unit is due to the output effect and what portion is due to the price effect?

If price exceeds average variable cost but is less than average total cost,a firm

Figure 13-11 -Refer to Figure 13-11.The diagram demonstrates that

Does the fact that monopolistically competitive firms do not achieve productive efficiency or allocative efficiency mean that there is a significant loss in consumer welfare?

How might a monopolistically competitive firm continually earn economic profit greater than zero?

Figure 13-8 -Refer to Figure 13-8 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?

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 the marginal profit from producing and selling the 5th case?

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

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.Should the firm represented in the diagram continue to stay in business despite its losses?

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?

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 Eco Energy's profit?

Figure 13-6 -Refer to Figure 13-6.The diagram depicts a firm

Figure 13-6 -Refer to Figure 13-6.What is the monopolistic competitor's profit maximizing output?

For allocative efficiency to hold,

The key characteristics of a monopolistically competitive market structure include

A monopolistically competitive firm that is earning profits will,in the long run,experience all of the following except

Explain the differences between total revenue,average revenue,and marginal revenue.

Figure 13-10 -Refer to Figure 13-10.Suppose the firm is currently producing Qf units.What happens if it increases its output to Qg units?

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?