Monopolistic competition is best described as

Monopolistic competition is best described as
 a. many firms with some control over price, and some product differentiation
  b. many firms with no control over price, producing identical products
  c. a few firms with some control over price, producing highly differentiated products
  d. a few firms with no control over price, producing similar products
  e. a single firm producing all of the output for the industry, with strong control over price

QUESTION 2

Airlines are __________ than they were before deregulation.
 a. more dangerous
  b. more concentrated
  c. higher priced
  d. flying fewer miles
  e. much more profitable

QUESTION 3

Economic profits in a competitive industry are signals that
 a. attract new firms into the industry
  b. prevent firms from adopting newer technologies
  c. encourage existing firms to continue to operate inefficiently
  d. indicate that business conditions are improving
  e. cause the industry's resources to be used in lower valued uses

QUESTION 4

Monopolistically competitive firms use product differentiation to increase the price elasticity of demand.
 a. True
  b. False

QUESTION 5

According to research by William Shepherd, competition has increased in U.S. industries since World War II due to
 a. both c and d
  b. all of the following
  c. international trade
  d. deregulation
  e. antitrust activity

QUESTION 6

In the short run, producers derive surplus from market exchange because
 a. total revenue is greater than the minimum they would require to sell the good
  b. total revenue is equal to the minimum amount they would require to sell the good
  c. total revenue is less than the minimum amount they would require to sell the good
  d. marginal revenue equals average revenue
  e. they can rob consumers of most of their consumer surplus

QUESTION 7

The demand curve facing Imelda's Shoe Boutique, a monopolistically competitive firm,
 a. is horizontal because Imelda's is small relative to the market as a whole
  b. is horizontal because Imelda's is large relative to the market as a whole
  c. slopes downward because Imelda's is small relative to the market as a whole
  d. slopes downward because Imelda's sells a differentiated product
  e. slopes downward because Imelda's firm is the entire industry

QUESTION 8

Increased international trade and deregulation have resulted in
 a. increased competition in the U.S. economy
  b. greater monopolization of industries in the U.S. economy
  c. more oligopolies and cartels in the U.S. economy
  d. greater government intervention in the U.S. economy
  e. no changes in the U.S. economy