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Briefly compare and contrast the perceived demand curve for a monopolistically competitive firm and a perfectly competitive firm.

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The perceived demand curve for a monopol...

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A successful advertising campaign may allow competing monopolists to


A) sell a greater quantity.
B) charge a higher price.
C) increase its profits.
D) do all of the above.

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

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Joe owns a restaurant. Many of the restaurants that he competes with recently closed, shifting his perceived demand curve. The following 2 tables show his old and new perceived demand curves. Joe owns a restaurant. Many of the restaurants that he competes with recently closed, shifting his perceived demand curve. The following 2 tables show his old and new perceived demand curves. Assume that Joe can only choose from the quantities of output given in the table. By how much does the price that he charges change after the restaurants leave the market? A) increase by 3 B) decrease by 3 C) increase by 4 D) decrease by 4 Joe owns a restaurant. Many of the restaurants that he competes with recently closed, shifting his perceived demand curve. The following 2 tables show his old and new perceived demand curves. Assume that Joe can only choose from the quantities of output given in the table. By how much does the price that he charges change after the restaurants leave the market? A) increase by 3 B) decrease by 3 C) increase by 4 D) decrease by 4 Assume that Joe can only choose from the quantities of output given in the table. By how much does the price that he charges change after the restaurants leave the market?


A) increase by 3
B) decrease by 3
C) increase by 4
D) decrease by 4

E) C) and D)
F) B) and C)

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A monopolistic competitor has the following information about cost and demand. A monopolistic competitor has the following information about cost and demand. Then, in the long run equilibrium, the firm will sell this good at what price? A) $5 B) $7 C) $10 D) $14 A monopolistic competitor has the following information about cost and demand. Then, in the long run equilibrium, the firm will sell this good at what price? A) $5 B) $7 C) $10 D) $14 Then, in the long run equilibrium, the firm will sell this good at what price?


A) $5
B) $7
C) $10
D) $14

E) A) and D)
F) A) and C)

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Briefly contrast the level that a monopolistically competitive firm will tend to produce at and the price it will charge with that of a perfectly competitive firm.

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A monopolistically competitiv...

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Which of the following would be classified as a differentiated product produced by a monopolistic competitor?


A) natural gas
B) Channel No. 5
C) electricity
D) tap water

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

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The following table shows the demand curve and cost information for a firm that is a monopoly. The following table shows the demand curve and cost information for a firm that is a monopoly. If they maximize their profits, what will their revenue equal? A) $16,000 B) $32,000 C) $54,000 D) $56,000 If they maximize their profits, what will their revenue equal?


A) $16,000
B) $32,000
C) $54,000
D) $56,000

E) C) and D)
F) None of the above

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Briefly explain what quantity a profit-maximizing monopolistic competitor will seek, as well as why or why not this type of competitive firm is productively efficient.

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A profit-maximizing monopolistic competi...

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When entry occurs in a monopolistically competitive industry,


A) marginal costs to society exceed the price people are willing to pay.
B) price is equal to marginal revenue gained by society.
C) the marginal revenue curve will shift to the left.
D) a smaller quantity will be demanded at any given price.

E) B) and C)
F) All of the above

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When exit occurs in a monopolistically competitive industry the


A) perceived demand and marginal revenue curves will shift to the right.
B) perceived demand and marginal revenue curves will shift to the left.
C) perceived demand curve will shift to the left.
D) marginal revenue curve will shift to the left.

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

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The first step to be undertaken by a profit-maximizing monopolistic competitor wanting to decide what price to charge is to


A) determine total revenue, total cost, and profit
B) select the profit maximizing quantity to produce
C) determine what price to charge for the product
D) determine average costs, total revenue, and profit

E) B) and C)
F) None of the above

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Briefly describe what an oligopoly is, as well as the circumstances that could allow oligopolists to earn their highest profits.

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An oligopoly is a situation where a few ...

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The perceived demand for a monopolistic competitor


A) is steep.
B) is flat.
C) takes competitors into account.
D) disregards competitors.

E) A) and C)
F) None of the above

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A monopolistic competitor has the following information about cost and demand. A monopolistic competitor has the following information about cost and demand. What will this firm's profits equal in the long run? A) -$55 B) $0 C) $250 D) $280 What will this firm's profits equal in the long run?


A) -$55
B) $0
C) $250
D) $280

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

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In the framework of an oligopoly, what strategy can work like a silent form of cooperation?


A) always match other cartel firms' price cuts, but don't match price increases
B) always match other cartel firms' price increases, but don't match price cuts
C) immediately match price increases
D) legally enforceable agreements

E) None of the above
F) B) and C)

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A monopolistically competitive firm may earn abnormally high profits in the


A) short term, but the process of entry will drive those profits to zero in the long run.
B) long term, but the process of entry will drive those profits to zero in the short run.
C) short run, but after entry occurs, the long term perceived demand curve shifts to the right.
D) long run, but after entry occurs, the short term perceived demand curve shifts to the right.

E) B) and D)
F) A) and D)

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List at least five examples of some intangible aspects that differentiate products.

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Some intangible aspects may be 1) promis...

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In the framework of monopolistic competition, advertising works because it causes


A) the steeper perceived demand curve to become flatter.
B) perceived demand curve to shift to the left.
C) perceived demand curve to shift to the right.
D) a steeper perceived demand curve, as well as c above.

E) A) and D)
F) B) and C)

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Briefly compare and contrast the perceived demand curve for a monopolistic competitor and a monopolist.

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The perceived demand curve for a monopol...

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