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

A monopolistically competitive firm that earns economic profits in the short run will face a more elastic demand curve in the long run.

Which of the following is not a characteristic of a monopolistically competitive firm in long-run equilibrium?

The Jeans Store sells 7 pairs of jeans per day when it charges $100 per pair.It sells 8 pairs of jeans per day at a price of $90 per pair.The marginal revenue of the eighth pair of jeans is

The entry and exit of firms in a monopolistically competitive market guarantee that

When a monopolistically competitive firm lowers it price one bad thing happens to the firm.What is this "one bad thing" called?

Unlike a perfectly competitive firm,a monopolistic competitor does not have a short-run shut-down point.

Figure 13-13 -Refer to Figure 13-13.Economies of scale are exhausted at which output level?

Quantity Price (dollars) Total Revenue (dollars) Total Variable Cost (dollars) Total Cost (dollars) 0 \ 21 \ 0 \ 0 \ 50 1 20 20 16 66 2 19 38 31 81 3 18 54 45 95 4 17 68 59 109 5 16 80 75 125 6 15 90 93 143 7 14 98 112 162 8 13 104 140 190 9 12 108 180 230 10 11 110 230 280 Table 13-3 shows the demand and cost schedules for a monopolistically competitive firm. -Refer to Table 13-3.What is the best course of action for the firm in the short run?

Figure 13-18 -Refer to Figure 13-18.The diagram demonstrates that

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

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.

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

All of the following characteristics are common to both monopolistic competition and perfect competition except

Being the first to sell a particular good can give a firm advantages over other firms that sell similar products.What is the name given to these advantages?

Figure 13-3 -Refer to Figure 13-3.What is the marginal revenue of the sixth unit of output?

If a typical monopolistically competitive firm is making short-run losses,then

If marginal revenue is negative then the revenue lost from receiving a lower price on all the units that could have been sold at the original price is smaller than the additional revenue from selling one more unit of the good.

Firms use two marketing tools to differentiate their products.What are these two tools?

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

How would a marketing campaign directed at single women improve the chances of success at a place like a cigar bar?