Economics

Monopolistically competitive firms have downward-sloping demand curves. In the long run, monopolisti

Monopolistically competitive firms have downward-sloping demand curves. In the long run, monopolisti

Monopolistically competitive firms have downward-sloping demand curves. In the long run, monopolistically competitive firms earn zero economic profits. These two characteristics imply that in the long run
A) monopolistically competitive markets

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Chimelo46

Excess capacity is a characteristic of monopolistically competitive firms. What does excess capacity

Excess capacity is a characteristic of monopolistically competitive firms. What does excess capacity

Excess capacity is a characteristic of monopolistically competitive firms. What does excess capacity mean?
A) It means that firms do not produce the output level that corresponds to the minimum point on their average total cost curves.
B)

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Chimelo46

In contrast with perfect competition, excess capacity characterizes monopolistic competition. Excess

In contrast with perfect competition, excess capacity characterizes monopolistic competition. Excess

In contrast with perfect competition, excess capacity characterizes monopolistic competition. Excess capacity is due to which of the following?
A) Monopolistically competitive firms produce at the minimum point on their average total cost curve

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Chimelo46

Which of the following is not a characteristic of a monopolistically competitive firm in long-run eq

Which of the following is not a characteristic of a monopolistically competitive firm in long-run eq

Which of the following is not a characteristic of a monopolistically competitive firm in long-run equilibrium?
A) Marginal revenue is equal to marginal cost.
B) Price is equal to average revenue.
C) The firm has excess capacity.

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Chimelo46

Which of the following statements is true about monopolistically competitive firms?

Which of the following statements is true about monopolistically competitive firms?

Which of the following statements is true about monopolistically competitive firms?
A) Unlike perfectly competitive firms, monopolistically competitive firms are able to raise their prices without losing all of their customers.
B) Like perf

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Chimelo46

Compared to a perfectly competitive firm, the demand curve facing a monopolistically competitive fir

Compared to a perfectly competitive firm, the demand curve facing a monopolistically competitive fir

Compared to a perfectly competitive firm, the demand curve facing a monopolistically competitive firm is
A) more elastic because there are many close substitutes for the product of a monopolistically competitive firm.
B) less elastic becaus

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Chimelo46

In the long run firms in both monopolistically competitive markets and perfectly competitive markets

In the long run firms in both monopolistically competitive markets and perfectly competitive markets

In the long run firms in both monopolistically competitive markets and perfectly competitive markets earn zero economic profits, but unlike perfectly competitive firms in the long run, monopolistically competitive firms
A) charge a price that i

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Chimelo46

In both monopolistically competitive and perfectly competitive industries

In both monopolistically competitive and perfectly competitive industries

In both monopolistically competitive and perfectly competitive industries
A) firms produce products for which there are no close substitutes.
B) there are high barriers to entry.
C) there are many buyers and sellers.
D) firms a

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Chimelo46

Suppose electronic cigarette manufacturer NJOY is successful in establishing a profitable market for

Suppose electronic cigarette manufacturer NJOY is successful in establishing a profitable market for

Suppose electronic cigarette manufacturer NJOY is successful in establishing a profitable market for e-cigarettes in what is a monopolistically competitive industry. In the long run, NJOY will most likely find it ________ to remain profitable as they

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Chimelo46

Consumers benefit from monopolistic competition by

Consumers benefit from monopolistic competition by

Consumers benefit from monopolistic competition by
A) being able to choose from products more closely suited to their tastes.
B) paying the lowest possible price for the product.
C) paying the same price as everyone else.
D) bein

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Chimelo46

Economists agree that a monopolistically competitive market structure

Economists agree that a monopolistically competitive market structure

Economists agree that a monopolistically competitive market structure
A) lowers consumer utility because consumers pay a price higher than the marginal cost of production.
B) is detrimental to society because it leads to a waste of scarce

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Chimelo46

Is a monopolistically competitive firm allocatively efficient?

Is a monopolistically competitive firm allocatively efficient?

Is a monopolistically competitive firm allocatively efficient?
A) No, because it does not produce at minimum average total cost.
B) Yes, because it produces where marginal cost equals marginal revenue.
C) No, because price is greater t

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VincenzoD

Is a monopolistically competitive firm productively efficient?

Is a monopolistically competitive firm productively efficient?

Is a monopolistically competitive firm productively efficient?
A) No, because it does not produce at minimum average total cost.
B) Yes, because it produces where marginal cost equals marginal revenue.
C) No, because price is greater t

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jorgebueno305

For allocative efficiency to hold

For allocative efficiency to hold

For allocative efficiency to hold
A) price must equal marginal revenue of the last unit sold.
B) price must equal the marginal cost of the last unit produced.
C) average variable cost is minimized in production.
D) average total c

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VincenzoD

For productive efficiency to hold

For productive efficiency to hold

For productive efficiency to hold
A) price must equal the marginal cost of the last unit produced.
B) price must equal marginal revenue of the last unit sold.
C) average variable cost is minimized in production.
D) average total c

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VincenzoD

Which of the following is not a characteristic of long-run equilibrium in a monopolistically competi

Which of the following is not a characteristic of long-run equilibrium in a monopolistically competi

Which of the following is not a characteristic of long-run equilibrium in a monopolistically competitive market?
A) Selling price equals average total cost.
B) Production is at minimum average total cost.
C) Marginal revenue equals mar

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VincenzoD

Long-run equilibrium under monopolistic competition is similar to that under perfect competition in

Long-run equilibrium under monopolistic competition is similar to that under perfect competition in

Long-run equilibrium under monopolistic competition is similar to that under perfect competition in that
A) firms produce at the minimum point of their average cost curves.
B) price equals marginal cost.
C) firms earn normal profits.

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VincenzoD

How does the long run equilibrium of a monopolistically competitive industry differ from that of a p

How does the long run equilibrium of a monopolistically competitive industry differ from that of a p

How does the long run equilibrium of a monopolistically competitive industry differ from that of a perfectly competitive industry?
A) A firm in monopolistic competition will earn economic profits but a firm in perfect competition earns zero pro

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VincenzoD

The table below shows the demand and cost data facing "Velvet Touches," a monopolistically competiti

The table below shows the demand and cost data facing "Velvet Touches," a monopolistically competiti

The table below shows the demand and cost data facing "Velvet Touches," a monopolistically competitive producer of velvet throw pillows.

Quantity   Price   Total Revenue   Marginal Revenue   Total Cost   Marginal Cost
1   $30          

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VincenzoD

What effect does the entry of new firms in a monopolistically competitive market have on the economi

What effect does the entry of new firms in a monopolistically competitive market have on the economi

What effect does the entry of new firms in a monopolistically competitive market have on the economic profits of existing firms in the market? How might existing firms attempt to counteract this effect?

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VincenzoD

What is the difference between zero accounting profit and zero economic profit?

What is the difference between zero accounting profit and zero economic profit?

What is the difference between zero accounting profit and zero economic profit?

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VincenzoD

If some monopolistically competitive firms exit their market after suffering short-run losses, the d

If some monopolistically competitive firms exit their market after suffering short-run losses, the d

If some monopolistically competitive firms exit their market after suffering short-run losses, the demand curves of remaining firms will shift to the right.
True or false?

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VincenzoD

A monopolistically competitive firm can increase its profits beyond the long-run equilibrium break-e

A monopolistically competitive firm can increase its profits beyond the long-run equilibrium break-e

A monopolistically competitive firm can increase its profits beyond the long-run equilibrium break-even level by deliberately lowering its price to force some of its competitors out of the market.
True or false?

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VincenzoD

When a monopolistically competitive firm breaks even in the long run, this is equivalent to earning

When a monopolistically competitive firm breaks even in the long run, this is equivalent to earning

When a monopolistically competitive firm breaks even in the long run, this is equivalent to earning a zero accounting profit.
True or false?

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VincenzoD

A monopolistically competitive industry that earns economic profits in the short run will face a mor

A monopolistically competitive industry that earns economic profits in the short run will face a mor

A monopolistically competitive industry that earns economic profits in the short run will face a more elastic demand curve in the long run.
True or false?

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VincenzoD

A monopolistically competitive industry that earns economic profits in the short run will be able to

A monopolistically competitive industry that earns economic profits in the short run will be able to

A monopolistically competitive industry that earns economic profits in the short run will be able to expand its market share even if the market size remains constant.
True or false?

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VincenzoD

If a monopolistically competitive firm breaks even, the firm is earning as much in this industry as

If a monopolistically competitive firm breaks even, the firm is earning as much in this industry as

If a monopolistically competitive firm breaks even, the firm is earning as much in this industry as it could in any other comparable industry.
True or false?

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VincenzoD

Despite being in a market with ________, from the mid-1990s to the mid-2000s Starbucks was able to s

Despite being in a market with ________, from the mid-1990s to the mid-2000s Starbucks was able to s

Despite being in a market with ________, from the mid-1990s to the mid-2000s Starbucks was able to significantly differentiate its products from the products of its competitors.
A) few barriers to entry
B) significant barriers to entry

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VincenzoD

A monopolistically competitive firm that is profitable in the short run will face competition that w

A monopolistically competitive firm that is profitable in the short run will face competition that w

A monopolistically competitive firm that is profitable in the short run will face competition that will eventually eliminate the firm's profits in the long run. But the firm can stave off competition and continue to earn economic profits if

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VincenzoD

If a store like hhgregg has higher costs than a comparable Best Buy store, the only way it can have

If a store like hhgregg has higher costs than a comparable Best Buy store, the only way it can have

If a store like hhgregg has higher costs than a comparable Best Buy store, the only way it can have higher profits is if
A) it has more locations than Best Buy.
B) its marginal revenue is lower than Best Buy's.
C) the demand for

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VincenzoD

Which of the following will not happen as a consequence of a monopolistically competitive firm suffe

Which of the following will not happen as a consequence of a monopolistically competitive firm suffe

Which of the following will not happen as a consequence of a monopolistically competitive firm suffering economic losses in the short run?
A) The firm's demand curve will shift to the right if it stays in business in the long run.
B)

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VincenzoD

Which of the following is true for a monopolistically competitive firm in long-run equilibrium?

Which of the following is true for a monopolistically competitive firm in long-run equilibrium?

Which of the following is true for a monopolistically competitive firm in long-run equilibrium?
A) P = ATC and MR = MC.
B) P = ATC and P = MC.
C) P > ATC and P > MR.
D) P > MR and MC = ATC.

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VincenzoD

Long-run equilibrium under monopolistic competition and perfect competition is similar in that

Long-run equilibrium under monopolistic competition and perfect competition is similar in that

Long-run equilibrium under monopolistic competition and perfect competition is similar in that
A) firms produce at the minimum point of their average cost curves.
B) price equals marginal cost.
C) firms break even.
D) price equal

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VincenzoD

If firms in a monopolistically competitive market are earning economic profits, which of the followi

If firms in a monopolistically competitive market are earning economic profits, which of the followi

If firms in a monopolistically competitive market are earning economic profits, which of the following scenarios best reflects the change a representative firm experiences as the market adjusts to its long-run equilibrium?
A) Demand decreases an

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VincenzoD

When new firms are encouraged to enter a monopolistically competitive market

When new firms are encouraged to enter a monopolistically competitive market

When new firms are encouraged to enter a monopolistically competitive market
A) some existing firms must be earning economic profits.
B) they do so because there is insufficient product differentiation.
C) the demand curve facing an ex

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VincenzoD

The entry and exit of firms in a monopolistically competitive market guarantee that

The entry and exit of firms in a monopolistically competitive market guarantee that

The entry and exit of firms in a monopolistically competitive market guarantee that
A) marginal revenue equals marginal cost and average total cost is minimized.
B) firms can earn economic profits in the long run.
C) price equals ave

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VincenzoD

One reason Starbucks experienced a decline in sales in the late 2000s is because

One reason Starbucks experienced a decline in sales in the late 2000s is because

One reason Starbucks experienced a decline in sales in the late 2000s is because
A) the product they offered was becoming less differentiated from their competitors' products.
B) the coffeehouse market transitioned from being monopolis

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VincenzoD

Which of the following would not occur as a result of a monopolistically competitive firm suffering

Which of the following would not occur as a result of a monopolistically competitive firm suffering

Which of the following would not occur as a result of a monopolistically competitive firm suffering a short-run economic loss?
A) The firm could exit the industry in the long run.
B) If the firm does not exit the industry in the long run

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VincenzoD

In the long run, if the demand curve of a monopolistically competitive firm is tangent to its averag

In the long run, if the demand curve of a monopolistically competitive firm is tangent to its averag

In the long run, if the demand curve of a monopolistically competitive firm is tangent to its average total cost curve then
A) the firm would break even.
B) the firm would shut down temporarily.
C) the firm would earn enough revenue

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VincenzoD

A monopolistically competitive firm that earns an accounting profit in the short run

A monopolistically competitive firm that earns an accounting profit in the short run

A monopolistically competitive firm that earns an accounting profit in the short run
A) must also earn an economic profit in the short run.
B) does not earn enough to earn an economic profit in the short run.
C) could earn an economi

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VincenzoD