Question 1

Firms in monopolistic competition can acquire some market power by:

Accepted Answer

A)  using price competition. 
B)  engaging in tacit collusion. 
C)  differentiating the product. 
D)  increasing their output to the perfectly competitive level. 
A)  using price competition. 
B)  engaging in tacit collusion. 
C)  differentiating the product. 
D)  increasing their output to the perfectly competitive level.

Question 2

The market for soft drinks, which is dominated by Coca Cola and Pepsi, is best considered to be an example of:

Accepted Answer

A)  perfect competition. 
B)  monopolistic competition. 
C)  oligopoly. 
D)  monopoly. 
A)  perfect competition. 
B)  monopolistic competition. 
C)  oligopoly. 
D)  monopoly.

Question 3

Use the following to answer questions 
Figure: Profits in Monopolistic Competition  
-(Figure: Profits in Monopolistic Competition) In panel (B) of the figure Profits in Monopolistic Competition, the profit-maximizing quantity of output is determined by the intersection at point:

Accepted Answer

A)  J. 
B)  K. 
C)  L. 
D)  M. 
A)  J. 
B)  K. 
C)  L. 
D)  M.

Question 4

When a monopolistically competitive firm is making zero economic profits, it is producing so that the average total cost curve is tangent to the demand curve. At this output:

Accepted Answer

A)  the firm is maximizing profits, and marginal cost must equal marginal revenue. 
B)  the firm is not maximizing profits, and a slight increase or decrease in output will lead to positive profits. 
C)  since economic profits are zero, the condition that marginal revenue equals marginal cost is irrelevant. 
D)  the condition that marginal revenue equals marginal cost continues to be relevant, but the marginal revenue and marginal cost curves need not intersect directly below the point of tangency between the average total cost curve and the demand curve. 
A)  the firm is maximizing profits, and marginal cost must equal marginal revenue. 
B)  the firm is not maximizing profits, and a slight increase or decrease in output will lead to positive profits. 
C)  since economic profits are zero, the condition that marginal revenue equals marginal cost is irrelevant. 
D)  the condition that marginal revenue equals marginal cost continues to be relevant, but the marginal revenue and marginal cost curves need not intersect directly below the point of tangency between the average total cost curve and the demand curve.

Firms in monopolistic competition can acquire some market power by:

The market for soft drinks, which is dominated by Coca Cola and Pepsi, is best considered to be an example of:

Use the following to answer questions Figure: Profits in Monopolistic Competition -(Figure: Profits in Monopolistic Competition) In panel (B) of the figure Profits in Monopolistic Competition, the profit-maximizing quantity of output is determined by the intersection at point:

When a monopolistically competitive firm is making zero economic profits, it is producing so that the average total cost curve is tangent to the demand curve. At this output:

First Principles

Economic Models- Trade-Offs and Trade

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas- Meddling With Markets

Elasticity

Taxes

The Rational Consumer

International Trade

Decision Making by Individuals and Firms

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Macroeconomics- the Big Picture

Gdp and the Consumer Price Index

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Macroeconomics- Events and Ideas

Open-Economy Macroeconomics

Graphs in Economics

Toward a Fuller Understanding

Consumer Preferences and Consumer Choice

Indifference Curve Analysis of Labor Supply

Filters

Exam 14: Monopolistic Competition and Product Differentiation

Firms in monopolistic competition can acquire some market power by:

The market for soft drinks, which is dominated by Coca Cola and Pepsi, is best considered to be an example of:

Use the following to answer questions Figure: Profits in Monopolistic Competition -(Figure: Profits in Monopolistic Competition) In panel (B) of the figure Profits in Monopolistic Competition, the profit-maximizing quantity of output is determined by the intersection at point:

When a monopolistically competitive firm is making zero economic profits, it is producing so that the average total cost curve is tangent to the demand curve. At this output:

First Principles

Economic Models- Trade-Offs and Trade

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas- Meddling With Markets

Elasticity

Taxes

The Rational Consumer

International Trade

Decision Making by Individuals and Firms

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Macroeconomics- the Big Picture

Gdp and the Consumer Price Index

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Macroeconomics- Events and Ideas

Open-Economy Macroeconomics

Graphs in Economics

Toward a Fuller Understanding

Consumer Preferences and Consumer Choice

Indifference Curve Analysis of Labor Supply

Filters