Question 1

Figure 16-11 
-Refer to Figure 16-11. If this firm profit-maximizes, what price will it charge?

Accepted Answer

The answer of Figure 16-11 
-Refer to Figure 16-11. If...

Question 2

Entry of new firms in monopolistically competitive industries can convey a negative externality on producers because firms lose customers and profits from the entry of new competitors. This externality is called the

Accepted Answer

business-s...

Question 3

Scenario 16-2
Suppose market demand for a product is given by the equation P = 20 - Q. For this market demand curve, marginal revenue is MR = 20 - 2Q.
-Refer to Scenario 16-2. If the marginal cost of producing this good is 4, how much total consumer surplus would consumers receive in this market?

Accepted Answer

A)  8
B)  12
C)  32
D)  64E) B) and C)
F) None of the above

Question 4

Although monopolistically competitive markets offer consumers a wide variety of differentiated products, there may still be insufficient variety if

Accepted Answer

A)  there are large fixed costs in the market.
B)  there are no barriers to entry in the market.
C)  the business-stealing externality is present in the market.
D)  the government does not impose regulations on the market.E) A) and D)
F) B) and D)

Question 5

Scenario 16-2
Suppose market demand for a product is given by the equation P = 20 - Q. For this market demand curve, marginal revenue is MR = 20 - 2Q.
-Refer to Scenario 16-2. If the marginal cost of producing this good is 4, what quantity would a profit-maximizing monopolist produce?

Accepted Answer

A)  Q = 2
B)  Q = 4
C)  Q = 6
D)  Q = 8E) None of the above
F) All of the above

Question 6

Consider a monopolistically competitive firm in a market in long-run equilibrium. This firm is likely earning

Accepted Answer

A)  a positive economic profit since it is charging a price above marginal cost.
B)  no economic profit since it is charging a price equal to its marginal cost.
C)  a positive economic profit since it is charging a price above its average total cost.
D)  no economic profit since it is charging a price equal to it average total cost.E) A) and B)
F) C) and D)

Question 7

Figure 16-13 
-Refer to Figure 16-13. Which letter represents the profit-maximizing price?

Accepted Answer

The answer of Figure 16-13 
-Refer to Figure 16-13. Which...

Question 8

Scenario 16-3
Peter operates an ice cream shop in the center of Fairfield. He sells several unusual flavors of organic, homemade ice cream so he has a monopoly over his own ice cream, though he competes with many other firms selling ice cream in Fairfield for the same customers. Peter's demand and cost values for sales per day are given in the table below. (Everyone who purchases Peter's ice cream buys a double scoop cone because it's so delicious.)  
-Refer to Scenario 16-3. Which of the following statements best describes the long run adjustment in this market?

Accepted Answer

A)  One or more ice cream shops in Fairfield closes, increasing the demand for Peter's ice cream. Peter's profits increase and he sustains positive profits in the long run.
B)  One or more ice cream shops in Fairfield closes, increasing the demand for Peter's ice cream. Peter's profits increase until he earns zero profit.
C)  One or more new ice cream shops in Fairfield opens and competes with Peter for customers, reducing the demand for Peter's ice cream. Peter's profits decline until he incurs losses and exits the industry.
D)  One or more new ice cream shops in Fairfield opens and competes with Peter for customers, reducing the demand for Peter's ice cream. Peter's profits decline until he earns zero profit.E) None of the above
F) A) and D)

Question 9

When a monopolistically competitive firm is in a long-run equilibrium, the values of marginal cost, average total cost, and price are all the same.

Accepted Answer

A) True 
 B)False

Question 10

A recent outbreak of hepatitis was linked to a national fast-food restaurant chain. This is an example of a case in which

Accepted Answer

A)  brand name identity increases the effectiveness of markets.
B)  brand name identity can be detrimental to the profitability of a firm.
C)  advertising is ineffective in salvaging perceptions of product quality.
D)  advertising cannot be used to establish brand loyalty.E) B) and D)
F) A) and D)

Question 11

Figure 16-13 
-Refer to Figure 16-13. What is the first step in this industry's adjustment to long run equilibrium?

Accepted Answer

The answer of Figure 16-13 
-Refer to Figure 16-13. What...

Question 12

Figure 16-8
The lines in the figures below illustrate the potential effect of entry and exit in a monopolistically competitive market on either the demand curve or the marginal cost curve of existing firms. 
-Refer to Figure 16-8. Which of the diagrams illustrates the impact of some existing firms leaving the market?

Accepted Answer

A)  panel a
B)  panel b
C)  panel c
D)  panel dE) A) and D)
F) None of the above

Question 13

Monopolistic competition is a type of

Accepted Answer

A)  oligopoly.
B)  market structure.
C)  price discrimination.
D)  advertising strategy.E) B) and C)
F) A) and D)

Question 14

The typical firm in the US economy

Accepted Answer

A)  has some degree of market power.
B)  sells its product for a price that is equal to the marginal cost of producing the last unit.
C)  is perfectly competitive.
D)  is a monopoly.E) A) and B)
F) A) and C)

Question 15

​An empirical study compared the price of eyeglasses in states that restricted advertising by optometrists with those that did not.The study revealed:
​

Accepted Answer

A)  ​That the average price of eyeglasses in states where advertising was restricted was higher than the average price in states were advertising was not restricted
B)  ​That the average price of eyeglasses in states where advertising was not restricted was higher than the average price in states where advertising was restricted
C)  ​That the average price of eyeglasses did not differ between states where advertising was restricted and those in which advertising was not restricted
D)  ​That the greater the level of advertising, the higher the average price of eyeglassesE) B) and C)
F) A) and D)

Question 16

Economists who argue that advertising enhances market efficiency suggest that celebrity advertising signals inferior product quality.

Accepted Answer

A) True 
 B)False

Question 17

The product-variety externality states that entry of a new firm conveys a negative externality on consumers.

Accepted Answer

A) True 
 B)False

Question 18

If advertising reduces a consumer's price sensitivity between identical goods, it is likely to

Accepted Answer

A)  increase the elasticity of demand for differentiated products.
B)  enhance competition and encourage more product diversity.
C)  reduce competition and reduce social welfare.
D)  encourage the consumption of all homogenous goods.E) A) and B)
F) A) and C)

Question 19

Figure 16-11 
-Refer to Figure 16-11. If this firm profit-maximizes, how much output will it produce?

Accepted Answer

The answer of Figure 16-11 
-Refer to Figure 16-11. If...

Question 20

Table 16-1
The following table shows the percentage of output supplied by the top eight firms in four different industries. 
-Refer to Table 16-1. Which industry has the highest concentration ratio?

Accepted Answer

A)  Industry A
B)  Industry B
C)  Industry C
D)  Industry DE) B) and C)
F) None of the above

Exam 16: Monopolistic Competition

Figure 16-13 -Refer to Figure 16-13. What is the first step in this industry's adjustment to long run equilibrium?

Correct Answer
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Correct Answer
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When a monopolistically competitive firm is in a long-run equilibrium, the values of marginal cost, average total cost, and price are all the same.

Correct Answer
verified

Table 16-1 The following table shows the percentage of output supplied by the top eight firms in four different industries. -Refer to Table 16-1. Which industry has the highest concentration ratio?

Correct Answer
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Figure 16-11 -Refer to Figure 16-11. If this firm profit-maximizes, how much output will it produce?

Correct Answer
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A recent outbreak of hepatitis was linked to a national fast-food restaurant chain. This is an example of a case in which

Correct Answer
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The product-variety externality states that entry of a new firm conveys a negative externality on consumers.

Correct Answer
verified

Scenario 16-2 Suppose market demand for a product is given by the equation P = 20 - Q. For this market demand curve, marginal revenue is MR = 20 - 2Q. -Refer to Scenario 16-2. If the marginal cost of producing this good is 4, how much total consumer surplus would consumers receive in this market?

Correct Answer
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Figure 16-13 -Refer to Figure 16-13. Which letter represents the profit-maximizing price?

Correct Answer
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If advertising reduces a consumer's price sensitivity between identical goods, it is likely to

Correct Answer
verified

Economists who argue that advertising enhances market efficiency suggest that celebrity advertising signals inferior product quality.

Correct Answer
verified

Consider a monopolistically competitive firm in a market in long-run equilibrium. This firm is likely earning

Correct Answer
verified

Monopolistic competition is a type of

Correct Answer
verified

Correct Answer
verified

Scenario 16-2 Suppose market demand for a product is given by the equation P = 20 - Q. For this market demand curve, marginal revenue is MR = 20 - 2Q. -Refer to Scenario 16-2. If the marginal cost of producing this good is 4, what quantity would a profit-maximizing monopolist produce?

Correct Answer
verified

Entry of new firms in monopolistically competitive industries can convey a negative externality on producers because firms lose customers and profits from the entry of new competitors. This externality is called the

Correct Answer
verified
business-s...
View Answer

Figure 16-11 -Refer to Figure 16-11. If this firm profit-maximizes, what price will it charge?

Correct Answer
verified

The typical firm in the US economy

Correct Answer
verified

An empirical study compared the price of eyeglasses in states that restricted advertising by optometrists with those that did not.The study revealed:

Correct Answer
verified

Although monopolistically competitive markets offer consumers a wide variety of differentiated products, there may still be insufficient variety if

Correct Answer
verified

Exam 16: Monopolistic Competition

Figure 16-13 -Refer to Figure 16-13. What is the first step in this industry's adjustment to long run equilibrium?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a monopolistically competitive firm is in a long-run equilibrium, the values of marginal cost, average total cost, and price are all the same.

Correct AnswerverifiedShow Answer

Table 16-1 The following table shows the percentage of output supplied by the top eight firms in four different industries. -Refer to Table 16-1. Which industry has the highest concentration ratio?

Correct AnswerverifiedShow Answer

Figure 16-11 -Refer to Figure 16-11. If this firm profit-maximizes, how much output will it produce?

Correct AnswerverifiedShow Answer

A recent outbreak of hepatitis was linked to a national fast-food restaurant chain. This is an example of a case in which

Correct AnswerverifiedShow Answer

The product-variety externality states that entry of a new firm conveys a negative externality on consumers.

Correct AnswerverifiedShow Answer

Scenario 16-2 Suppose market demand for a product is given by the equation P = 20 - Q. For this market demand curve, marginal revenue is MR = 20 - 2Q. -Refer to Scenario 16-2. If the marginal cost of producing this good is 4, how much total consumer surplus would consumers receive in this market?

Correct AnswerverifiedShow Answer

Figure 16-13 -Refer to Figure 16-13. Which letter represents the profit-maximizing price?

Correct AnswerverifiedShow Answer

If advertising reduces a consumer's price sensitivity between identical goods, it is likely to

Correct AnswerverifiedShow Answer

Economists who argue that advertising enhances market efficiency suggest that celebrity advertising signals inferior product quality.

Correct AnswerverifiedShow Answer

Consider a monopolistically competitive firm in a market in long-run equilibrium. This firm is likely earning

Correct AnswerverifiedShow Answer

Monopolistic competition is a type of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Scenario 16-2 Suppose market demand for a product is given by the equation P = 20 - Q. For this market demand curve, marginal revenue is MR = 20 - 2Q. -Refer to Scenario 16-2. If the marginal cost of producing this good is 4, what quantity would a profit-maximizing monopolist produce?

Correct AnswerverifiedShow Answer

Entry of new firms in monopolistically competitive industries can convey a negative externality on producers because firms lose customers and profits from the entry of new competitors. This externality is called the

Correct Answerverifiedbusiness-s...View AnswerShow Answer

Figure 16-11 -Refer to Figure 16-11. If this firm profit-maximizes, what price will it charge?

Correct AnswerverifiedShow Answer

The typical firm in the US economy

Correct AnswerverifiedShow Answer

​An empirical study compared the price of eyeglasses in states that restricted advertising by optometrists with those that did not.The study revealed: ​

Correct AnswerverifiedShow Answer

Although monopolistically competitive markets offer consumers a wide variety of differentiated products, there may still be insufficient variety if

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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business-s...
View Answer

Correct Answer
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Correct Answer
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An empirical study compared the price of eyeglasses in states that restricted advertising by optometrists with those that did not.The study revealed:

Correct Answer
verified

Correct Answer
verified