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

A monopolistic competitor does not earn profits in the long run unless it can successfully differentiate its product in the minds of its consumers.

A monopolistically competitive firm faces a downward-sloping demand curve because

One reason why the coffeehouse market is competitive is that

In monopolistic competition there is/are

There are many cattle ranchers in the world,and there are also many McDonald's restaurants in the world.Why,then,does a McDonald's restaurant face a downward sloping demand curve while a cattle rancher faces a horizontal demand curve?

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.Based on the data in the table,which of the following statements is true?

Both the perfectly competitive firm and the monopolistically competitive firm produce at the output where marginal revenue equals marginal cost (MR = MC)but only the perfectly competitive firm achieves allocative efficiency.Explain why this is the case.

Brand management refers to

If a monopolistically competitive firm lowers its price and,as a result,its total revenue decreases then

A profit-maximizing monopolistically competitive firm produces and sells an allocatively efficient quantity of output.

In what way does long-run equilibrium under monopolistic competition differ from long-run equilibrium under perfect competition?

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

Suppose Jason owns a small pastry shop.Jason wants to maximize his profit,and thinking back to the college microeconomics class he took in college,he decides he needs to produce a quantity of pastries which will minimize his average total cost.Will Jason's strategy necessarily maximize profits for his pastry shop?

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.Victoria's profit-maximizing quantity sold (Q)and price (P)are

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?

You are planning to open a new Italian restaurant in your hometown where there are three other Italian restaurants.You plan to distinguish your restaurant from your competitors by offering northern Italian cuisine and using locally grown organic produce.What is likely to happen in the restaurant market in your hometown after you open?

Which of the following is true of a typical firm in a monopolistically 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 is the area that represents the profit or loss experienced by the firm?