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Exam 26: Monopolistic Competition

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Question 41

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Which of the following market structures will have only normal profit in the long run?

A) Monopoly.
B) Duopoly.
C) Monopolistic competition.
D) Oligopoly.

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Question 42

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The combined market share for the top four firms in a monopolistically competitive industry will typically be in the range of 20 to 40 percent.

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Question 43

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Refer to Figure 26.4 for a monopolistically competitive firm.If the firm currently faces Demand₁ and MR₁,then it will earn

A successful advertising campaign alters the demand curve and the supply curve facing the firm.

The kinked oligopoly demand curve does not describe the demand curve for monopolistic competition because in monopolistically competitive markets,

For which of the following market structures will the firm's demand curve be tangent to the ATC curve in the long run?

Firms in a monopolistically competitive market make independent production decisions.

In monopolistic competition there is allocative inefficiency because

As new firms enter a monopolistically competitive industry,the demand curve for an individual firm shifts to the right.

Brand loyalty

Demand and Cost Data for Sylvie's Shampoo Company Table 26.2 A Monopolistically Competitive Firm $\begin{array}{|r|r|r|r|r|}\hline&\text { Demand Data }&&\\\text { Price } & \text { Quantity } & \text { Cost Data Output } & \text { Total Cost } \\\hline \$ 11 & 6 & 6 & \$ 48 \\\hline \$ 10 & 7 & 7 & \$ 52 \\\hline\$9&8&8&\$57\\\hline \$ 8 & 9 & 9 & \$63 \\\hline \$7 & 10& 10&\$70 \\\hline\end{array}$ Refer to Table 26.2.To maximize profit,Sylvie's Shampoo Company.should produce ________ bottles of shampoo and charge a price of ________ each.

A concentration ratio measures the

Monopolistic competition results in allocative

A major difference between oligopoly and monopolistic competition is that oligopolies do not

In monopolistically competitive markets,product differentiation is a significant barrier to entry.

An In the News article titled "Selling "Pure Water": A $Billion Scam?" refers to the use of advertising.When a firm successfully advertises its product,the firm

An In the News article titled "Selling "Pure Water": A $Billion Scam?" refers to the use of advertising.When a firm successfully advertises its product,the price elasticity of demand becomes

Demand and Cost Data for Will's Beach Ball Company Table 26.1 A Monopolistically Competitive Firm $\begin{array}{|r|r|r|r|r|}\hline&\text { Demand Data }&&\\\text { Price } & \text { Quantity } & \text { Cost Data Output } & \text { Total Cost } \\\hline \$ 11 & 6 & 6 & \$ 48 \\\hline \$ 10 & 7 & 7 & \$ 52 \\\hline\$9&8&8&\$57\\\hline \$ 8 & 9 & 9 & \$63 \\\hline \$7 & 10& 10&\$70 \\\hline\end{array}$ Refer to Table 26.1.At the profit-maximizing output and price,Will's Beach Ball Company will earn a ________ economic profit,and ________ the market will occur.

Demand and Cost Data for Sylvie's Shampoo Company Table 26.2 A Monopolistically Competitive Firm $\begin{array} { | r | r | r | r | } \hline { \text { Price } } &{ \begin{array} { c } \text { Demand Data } \\\text { Quartity }\end{array} } & \text { Cost Data Output } & { \text { Total Cost } } \\\hline \$ 22 & 6 & 6 & \$ 96 \\\hline \$ 20 & 7 & 7 & \$ 104 \\\hline \$ 18 & 8 & 8 & \$ 114 \\\hline \$ 16 & 9& 9 & \$ 126 \\\hline \$ 14 & 10 & 10 & \$ 140 \\\hline\end{array}$ Refer to Table 26.2.At the profit-maximizing output and price,Sylvie's Shampoo Company will earn a profit equal to

All of the following are examples of nonprice competition except