Question 1

A market structure with only a few sellers, each offering similar or identical products, is known as

Accepted Answer

A)   oligopoly.
B)   monopoly.
C)   monopolistic competition.
D)   perfect competition.E) A) and B)
F) None of the above

Question 2

In the long run, a firm in a perfectly competitive market operates

Accepted Answer

A)   at its efficient scale, and a monopolistically competitive firm operates at its efficient scale.
B)   at its efficient scale, and a monopolistically competitive firm operates with excess capacity.
C)   with excess capacity, and a monopolistically competitive firm operates with excess capacity.
D)   with excess capacity, and a monopolistically competitive firm operates at its efficient scale.E) All of the above
F) B) and D)

Question 3

A monopolistically competitive firm has the following cost structure:  The firm faces the following demand curve:  To maximize profit (or minimize losses) , the firm will produce

Accepted Answer

A)   20 units.
B)   30 units.
C)   40 units.
D)   50 units.E) B) and C)
F) None of the above

Question 4

Monopolistic competition is characterized by

Accepted Answer

A)   i)  and ii)  only
B)   ii)  and iv)  only
C)   i) , ii) , and iii)  only
D)   ii) , iii) , and iv)  onlyE) A) and B)
F) None of the above

Question 5

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) A) and B)
F) B) and C)

Question 6

Table 16-7
A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to 20. 
-Refer to Table 16-7. If this firm profit maximizes and faces a constant marginal cost of $7, does it have excess capacity? How do you know?

Accepted Answer

Yes, avera...

Question 7

For a profit-maximizing firm in a monopolistically competitive market, when price is equal to average total cost, price must lie above marginal cost.

Accepted Answer

A) True 
 B)False

Question 8

There is general disagreement among economists about the role of advertising, but there is widespread agreement about the role of brand names on market efficiency.

Accepted Answer

A) True 
 B)False

Question 9

When an industry has many firms, the industry is

Accepted Answer

A)   an oligopoly if the firms sell differentiated products, but it is monopolistically competitive if the firms sell identical products.
B)   an oligopoly if the firms sell differentiated products, but it is perfectly competitive if the firms sell identical products.
C)   monopolistically competitive if the firms sell differentiated products, but it is perfectly competitive if the firms sell identical products.
D)   perfectly competitive if the firms sell differentiated products, but it is monopolistically competitive if the firms sell identical products.E) C) and D)
F) A) and C)

Question 10

The term excess capacity refers to the fact that a firm operates on the upward-sloping portion of its average-total- cost curve.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

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

Question 12

A firm in a monopolistically competitive market can earn both short-run and long-run profits.

Accepted Answer

A) True 
 B)False

Question 13

Monopolistic competition is an inefficient market structure because

Accepted Answer

A)   price exceeds marginal cost.
B)   it has a deadweight loss, just as monopoly does.
C)   at the equilibrium, some consumers will value the good at more than the marginal cost of production.
D)   All of the above are correct.E) All of the above
F) A) and B)

Question 14

Scenario 16-8
Burger Bonanza, a major national burger chain, recently decided to spend $4 million on an advertising campaign featuring a world famous actor to promote its new Bomber Burger.
-Refer to Scenario 16-8. What can consumers conclude from Burger Bonanza's willingness to spend $4 million on an advertising campaign?

Accepted Answer

high quali...

Question 15

Imperfectly competitive firms are characterized by

Accepted Answer

A)   horizontal demand curves.
B)   standardized products.
C)   a large number of small firms.
D)   price making ability.E) A) and B)
F) A) and C)

Question 16

A typical firm in the US economy would be classified as

Accepted Answer

A)   perfectly competitive.
B)   imperfectly competitive.
C)   a duopolist.
D)   an oligopolist.E) B) and C)
F) A) and D)

Question 17

In the long run, monopolistically competitive firms produce where demand equals marginal cost.

Accepted Answer

A) True 
 B)False

Question 18

Defenders of advertising argue that it is not rational for profit-maximizing firms to spend money on advertising for products that have

Accepted Answer

A)   superior quality.
B)   inferior or mediocre quality.
C)   low prices.
D)   limited availability.E) C) and D)
F) All of the above

Question 19

Figure 16-7 
-Refer to Figure 16-7. The firm depicted in panel b faces a horizontal demand curve. If panel b depicts a profit- maximizing firm,

Accepted Answer

A)   it could be operating in either a perfectly competitive market or in a monopolistically competitive market.
B)   it would not have excess capacity in its production as long as it is earning zero economic profit.
C)   it is able to choose the price at which it sells its product.
D)   the firm can always raise its profit by increasing production since consumers will buy as much as the firm can produce.E) A) and B)
F) A) and C)

Question 20

Table 16-5
This table shows the demand schedule, marginal cost, and average total cost for a monopolistically competitive firm. 
-Refer to Table 16-5. What is this firm's total cost at the profit­maximizing quantity?

Accepted Answer

A)   $12
B)   $18
C)   $32
D)   $36E) A) and B)
F) A) and C)

Exam 16: Monopolistic Competition

A market structure with only a few sellers, each offering similar or identical products, is known as

Correct Answer
verified

Figure 16-7 -Refer to Figure 16-7. The firm depicted in panel b faces a horizontal demand curve. If panel b depicts a profit- maximizing firm,

Correct Answer
verified

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

Correct Answer
verified

The term excess capacity refers to the fact that a firm operates on the upward-sloping portion of its average-total- cost curve.

Correct Answer
verified

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
verified

In the long run, a firm in a perfectly competitive market operates

Correct Answer
verified

There is general disagreement among economists about the role of advertising, but there is widespread agreement about the role of brand names on market efficiency.

Correct Answer
verified

A firm in a monopolistically competitive market can earn both short-run and long-run profits.

Correct Answer
verified

A monopolistically competitive firm has the following cost structure: The firm faces the following demand curve: To maximize profit (or minimize losses) , the firm will produce

Correct Answer
verified

Defenders of advertising argue that it is not rational for profit-maximizing firms to spend money on advertising for products that have

Correct Answer
verified

Imperfectly competitive firms are characterized by

Correct Answer
verified

Monopolistic competition is an inefficient market structure because

Correct Answer
verified

In the long run, monopolistically competitive firms produce where demand equals marginal cost.

Correct Answer
verified

When an industry has many firms, the industry is

Correct Answer
verified

Table 16-5 This table shows the demand schedule, marginal cost, and average total cost for a monopolistically competitive firm. -Refer to Table 16-5. What is this firm's total cost at the profitmaximizing quantity?

Correct Answer
verified

Correct Answer
verified
high quali...
View Answer

Monopolistic competition is characterized by

Correct Answer
verified

For a profit-maximizing firm in a monopolistically competitive market, when price is equal to average total cost, price must lie above marginal cost.

Correct Answer
verified

A typical firm in the US economy would be classified as

Correct Answer
verified

Table 16-7 A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to 20. -Refer to Table 16-7. If this firm profit maximizes and faces a constant marginal cost of $7, does it have excess capacity? How do you know?

Correct Answer
verified
Yes, avera...
View Answer

Exam 16: Monopolistic Competition

A market structure with only a few sellers, each offering similar or identical products, is known as

Correct AnswerverifiedShow Answer

Figure 16-7 -Refer to Figure 16-7. The firm depicted in panel b faces a horizontal demand curve. If panel b depicts a profit- maximizing firm,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The term excess capacity refers to the fact that a firm operates on the upward-sloping portion of its average-total- cost curve.

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

In the long run, a firm in a perfectly competitive market operates

Correct AnswerverifiedShow Answer

There is general disagreement among economists about the role of advertising, but there is widespread agreement about the role of brand names on market efficiency.

Correct AnswerverifiedShow Answer

A firm in a monopolistically competitive market can earn both short-run and long-run profits.

Correct AnswerverifiedShow Answer

A monopolistically competitive firm has the following cost structure: The firm faces the following demand curve: To maximize profit (or minimize losses) , the firm will produce

Correct AnswerverifiedShow Answer

Defenders of advertising argue that it is not rational for profit-maximizing firms to spend money on advertising for products that have

Correct AnswerverifiedShow Answer

Imperfectly competitive firms are characterized by

Correct AnswerverifiedShow Answer

Monopolistic competition is an inefficient market structure because

Correct AnswerverifiedShow Answer

In the long run, monopolistically competitive firms produce where demand equals marginal cost.

Correct AnswerverifiedShow Answer

When an industry has many firms, the industry is

Correct AnswerverifiedShow Answer

Table 16-5 This table shows the demand schedule, marginal cost, and average total cost for a monopolistically competitive firm. -Refer to Table 16-5. What is this firm's total cost at the profit­maximizing quantity?

Correct AnswerverifiedShow Answer

Correct Answerverifiedhigh quali...View AnswerShow Answer

Monopolistic competition is characterized by

Correct AnswerverifiedShow Answer

For a profit-maximizing firm in a monopolistically competitive market, when price is equal to average total cost, price must lie above marginal cost.

Correct AnswerverifiedShow Answer

A typical firm in the US economy would be classified as

Correct AnswerverifiedShow Answer

Table 16-7 A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to 20. -Refer to Table 16-7. If this firm profit maximizes and faces a constant marginal cost of $7, does it have excess capacity? How do you know?

Correct AnswerverifiedYes, avera...View AnswerShow Answer

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Table 16-5 This table shows the demand schedule, marginal cost, and average total cost for a monopolistically competitive firm. -Refer to Table 16-5. What is this firm's total cost at the profitmaximizing quantity?

Correct Answer
verified

Correct Answer
verified
high quali...
View Answer

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verified
Yes, avera...
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