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

Why are demand and marginal revenue represented by the same curve for a firm in a perfectly competitive market,but by separate curves for a firm in a monopolistically competitive market?

Monopolistic competition is a market structure in which

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?

If a firm can produce a product at a lower average cost than its competitors,it stands a better chance of earning economic profit.

Which of the following statements is true about monopolistically competitive firms?

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

For a monopolistically competitive firm,price equals average revenue.

Assume that 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 $111.11 and marginal cost is $118,then to maximize profits the firm should increase its output.

Arturo runs a Taco Bell franchise.He is selling 250 Gordita Supremes per week at a price of $2.75.If he lowers the price to $2.70,he will sell 251 Gordita Supremes.What is the marginal revenue of the 251st Gordita Supreme? If selling the extra Gordita Supreme adds $0.20 to Arturo's costs,what will be the effect on his profit from selling 251 Gordita Supremes instead of 250?

Compared to a perfectly competitive firm,the demand curve facing a monopolistically competitive firm is

Which of the following characterizes the market that Starbucks competes in?

Figure 13-6 -Refer to Figure 13-6.Suppose the above graph represents the relationship between the average total cost of producing notebook computers and the quantity of notebook computers produced by Dell.On a graph,illustrate the demand,MR,MC,and ATC curves which would represent Dell maximizing profits at a quantity of 100,000 per month and identify the area on the graph which represents the profit.

For a monopolistically competitive firm,marginal revenue

Figure 13-10 Figure 13-10 shows cost and demand curves for a monopolistically competitive producer of iced tea. -Refer to Figure 13-10.to answer the following questions. a.What is the profit-maximizing output level? b.What is the profit-maximizing price? c.At the profit-maximizing output level,how much profit will be realized? d.Does this graph most likely represent the long run or the short run? Why?

In contrast with perfect competition,excess capacity characterizes monopolistic competition.Excess capacity is due to which of the following?

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?

Table 13-1 -Refer to Table 13-1.What is the marginal revenue of the 3rd unit?

Which of the following is true for a firm with a downward-sloping demand curve for its product?

The key characteristics of a monopolistically competitive market structure include

A major difference between monopolistic competition and perfect competition is