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Exam 12: Monopolistic Competition

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Question 31

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If a monopolistic competitor is maximizing profit, it is producing at a point where marginal cost

A) Is less than price.
B) Equals price.
C) Is greater than price.
D) Equals average total cost.

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Question 32

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Entry into a market characterized by monopolistic competition is generally

A) Entirely blocked by existing firms.
B) Very easy because few barriers exist.
C) As difficult as in oligopoly.
D) More difficult than entry into monopolized markets.

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Question 33

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The competitive dimension of monopolistic competition is that

For a monopolistically competitive firm, barriers to entry are high, which allows the firm to earn positive economic profits in the long run.

A monopolistically competitive firm that runs a successful advertising campaign creates enormous goodwill, but this goodwill does little to increase the value of the company.

Refer to Figure 26.4 for a monopolistically competitive firm.In the long run this firm will charge a price of ________ and produce an output of _______.

A World View article titled "The Best Global Brands" discusses the value of brand names.In 2014 which of the following was the most valuable brand name?

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

If a monopolistic competitor lowers its price, it will attract a significant number of new customers.

Which firm in Figure 26.5 is most likely a monopolistically competitive firm in the long run?

One of the main differences between an oligopoly and a monopolistically competitive firm is that a monopolistically competitive firm

Demand and Cost Data for Will's Beach Ball Company

Price	Demand Data Quantity	Cost Data Output	Total Cost
$11	6	6	$48
$10	7	7	$52
$9	8	8	$57
$8	9	9	$63
$7	10	10	$70

Table $26.1$ A Monopolistically Competitive Firm Refer to Table 26.2.To maximize profit, Sylvie's Shampoo Company.should produce _______ bottles of shampoo and charge a price of _______ each.

In monopolistic competition, modest changes in the output or price of any single firm will have no significant influence on the sales of other firms.

Refer to Figure 26.3 for a monopolistically competitive firm.The allocatively efficient output for this firm is

Monopolistically competitive industries are characterized by all of the following except

The main difference between perfect competition and monopolistic competition is

Product differentiation refers to

The monopolistically competitive firm earns zero economic profit in the long run.

A monopolistically competitive firm can raise its price somewhat without fear of great change in unit sales because

An In the News article titled "Selling "Pure Water": A $Billion Scam?" refers to the use of advertising.Successful advertising can do all of the following except