Economics Chapter 15 Multiple Choice Monopolistically Competitive Indust Question Answer

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145. Multiple Choice: Figure: Monopolistic Competition II R…

Question Figure: Monopolistic Competition II

Reference: Ref 15-8

(Figure: Monopolistic Competition II) Which of the panels in the figure Monopolistic Competition II shows a

monopolistic competitor producing where price is greater than marginal revenue?

146. Multiple Choice: Figure: Monopolistic Competition II R…

Question Figure: Monopolistic Competition II

Reference: Ref 15-8

(Figure: Monopolistic Competition II) Which of the panels in the figure Monopolistic Competition II shows a

monopolistic competitor in long-run equilibrium?

147. Multiple Choice: Reference: Ref 15-9 (Figure: Monopol...

Question

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Reference: Ref 15-9

(Figure: Monopolistic Competition III) The figure Monopolistic Competition III shows the demand, marginal

revenue, marginal cost, and average total cost curves for Pat‘s Pizza Parlor, a monopolistic competitor in

the food–to-go industry. The optimal level of output for Pat’s Pizza Parlor is ________ and the profit-

maximizing price is ________.

148. Multiple Choice: Reference: Ref 15-9 (Figure: Monopol...

Question

Reference: Ref 15-9

(Figure: Monopolistic Competition III) The figure Monopolistic Competition III shows the demand, marginal

revenue, marginal cost, and average total cost curves for Pat‘s Pizza Parlor, a monopolistic competitor in

the food–to-go industry. When Pat’s Pizza Parlor maximizes profit, profit will be:

Points: 0

149. Multiple Choice: Reference: Ref 15-9 (Figure: Monopol...

Question

Reference: Ref 15-9

(Figure: Monopolistic Competition III) The figure Monopolistic Competition III shows the demand, marginal

revenue, marginal cost, and average total cost curves for Pat‘s Pizza Parlor, a monopolistic competitor in

the food–to-go industry. In the long run, the demand curve facing Pat’s Pizza Parlor will shift to the

________ as competitors ________ the market.

150. Multiple Choice: Toby operates a small deli downtown. ...

Question Toby operates a small deli downtown. The deli industry is monopolistically competitive. Toby tells you he is

producing the quantity that minimizes his average total cost. Assuming that Toby is maximizing profits,

you know Toby‘s:

151. Multiple Choice: Toby operates a small deli downtown. ...

Question Toby operates a small deli downtown. The deli industry is monopolistically competitive. Toby tells you that

his and every other deli in town is producing the quantity that minimizes their average total cost. Assuming

the delis are maximizing profits, you know that the:

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152. Multiple Choice: Figure: Monopolistic Competition IV R…

Question Figure: Monopolistic Competition IV

Reference: Ref 15-10

(Figure: Monopolistic Competition IV) The monopolistic competitor in the figure Monopolistic Competition IV

is producing at the output level that maximizes profits (minimizes losses). The shaded rectangle depicts

the level of:

153. Multiple Choice: Figure: Monopolistic Competition V Re…

Question Figure: Monopolistic Competition V

Reference: Ref 15-11

(Figure: Monopolistic Competition V) The figure Monopolistic Competition V illustrates a firm in the

________; in the ________, the demand and marginal revenue curves will shift to the ________.

154. Multiple Choice: Figure: Monopolistic Competition V Re…

Question

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Figure: Monopolistic Competition V

Reference: Ref 15-11

(Figure: Monopolistic Competition V) In the figure Monopolistic Competition V, in the long run firms will:

155. Multiple Choice: Figure: Monopolistic Competition VI R...

Question Figure: Monopolistic Competition VI

Reference: Ref 15-12

(Figure: Monopolistic Competition VI) The figure Monopolistic Competition VI illustrates a firm in the

________; in the ________, the demand and marginal revenue curves will shift to the ________.

156. Multiple Choice: Figure: Monopolistic Competition VI R...

Question

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Figure: Monopolistic Competition VI

Reference: Ref 15-12

(Figure: Monopolistic Competition VI) In the figure Monopolistic Competition VI, in the long run firms will:

157. Multiple Choice: Figure: Profit Maximization in Monopo...

Question Figure: Profit Maximization in Monopolistic Competition

Reference: Ref 15-13

(Figure: Profit Maximization in Monopolistic Competition) In panel A of the figure Profit Maximization in Monopolistic

Competition, the profit-maximizing price and quantity are ________ and ________.

158. Multiple Choice: Figure: Profit Maximization in Monopo...

Question

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Figure: Profit Maximization in Monopolistic Competition

Reference: Ref 15-13

(Figure: Profit Maximization in Monopolistic Competition) Look at the figure Profit Maximization in Monopolistic Competition.

A firm in monopolistic competition will maximize profits by producing the level of output at which:

159. Multiple Choice: Figure: Profit Maximization in Monopo...

Question Figure: Profit Maximization in Monopolistic Competition

Reference: Ref 15-13

(Figure: Profit Maximization in Monopolistic Competition) In the short run, a firm in monopolistic competition may experience

economic profits. The profits in the figure Profit Maximization in Monopolistic Competition, panel A, are:

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160. Multiple Choice: Figure: Profit Maximization in Monopo...

Question Figure: Profit Maximization in Monopolistic Competition

Reference: Ref 15-13

(Figure: Profit Maximization in Monopolistic Competition) Look at the figure Profit Maximization in Monopolistic Competition.

If other firms see economic profits in the industry, they will enter it, and the demand curve for firms already in the industry

will shift to the ________; in the long run, this will result in an economic profit ________ and a price ________.

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161. Multiple Choice: Figure: Profit Maximization in Monopo...

Question Figure: Profit Maximization in Monopolistic Competition

Reference: Ref 15-13

(Figure: Profit Maximization in Monopolistic Competition) Look at the figure Profit Maximization in Monopolistic Competition.

In monopolistic competition, long-run equilibrium is characterized by:

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162. Multiple Choice: Figure: Profit Maximization in Monopo...

Question Figure: Profit Maximization in Monopolistic Competition

Reference: Ref 15-13

(Figure: Profit Maximization in Monopolistic Competition) In panel A of the figure Profit Maximization in Monopolistic

Competition, if the firm raises its price above P, it will:

Answer lose all of its customers.

163. Multiple Choice: Figure: Profit Maximization in Monopo...

Question

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Figure: Profit Maximization in Monopolistic Competition

Reference: Ref 15-13

(Figure: Profit Maximization in Monopolistic Competition) Look at the figure Profit Maximization in Monopolistic Competition.

When the demand curve for a firm in monopolistic competition shifts, the marginal revenue curve:

164. Multiple Choice: Figure: Profit Maximization in Monopo...

Question Figure: Profit Maximization in Monopolistic Competition

Reference: Ref 15-13

(Figure: Profit Maximization in Monopolistic Competition) In panel B of the figure Profit Maximization in Monopolistic

Competition, the long-run equilibrium will result in:

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165. Multiple Choice: Figure: Profit Maximization in Monopo...

Question Figure: Profit Maximization in Monopolistic Competition

Reference: Ref 15-13

(Figure: Profit Maximization in Monopolistic Competition) In panel B of the figure Profit Maximization in Monopolistic

Competition, the profit-maximizing price is P2 and the ATC curve is tangent to the new demand curve. The portion of the

ATC that lies to the right of the tangency and continues down to the intersection of MC with ATC indicates:

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166. Multiple Choice: A monopolistically competitive indust…

Question A monopolistically competitive industry shares some of the same characteristics as perfect competition,

including:

167. Multiple Choice: Which of the following is true?

Question Which of the following is true?

168. Multiple Choice: The price in a long-run equilibrium f…

Question The price in a long-run equilibrium for a monopolistically competitive firm is __________and output is

________, compared to that of a perfectly competitive firm with an identical production function and cost

curves.

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169. Multiple Choice: The profit-maximizing rule, expressed...

Question The profit-maximizing rule, expressed as ________, is adhered to by firms operating in a market that

is________.

170. Multiple Choice: The failure to produce enough to mini...

Question The failure to produce enough to minimize average total cost is termed:

Answer economic profits.

171. Multiple Choice: The main characteristic that distingu...

Question The main characteristic that distinguishes monopolistic competition from perfect competition is:

Answer easy entry and exit.

172. Multiple Choice: Monopolistic competition within an in...

Question Monopolistic competition within an industry results in:

Answer overutilization of plants.

173. Multiple Choice: Long-run equilibrium in perfect compe…

Question Long-run equilibrium in perfect competition and in monopolistic competition are similar because in both,

firms:

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174. Multiple Choice: The broccoli market is perfectly comp…

Question The broccoli market is perfectly competitive. This means that the price of broccoli is ________ than the

price would be if the market were monopolistically competitive, and broccoli output is ________ than if it

were monopolistically competitive.

175. Multiple Choice: A monopolistically competitive firm h...

Question A monopolistically competitive firm has excess capacity in the long run. This means that it:

176. Multiple Choice: The restaurant industry is characteri...

Question The restaurant industry is characterized by excess capacity. This means that:

Answer restaurants are producing more than their profit-maximizing level.

177. Multiple Choice: Firms in the monopolistically competi…

Question Firms in the monopolistically competitive movie industry face excess capacity. This means that there are

________ movies than the output at which ________ cost is minimized.

178. Multiple Choice: Figure: Comparing Long-Run Equilibriu...

Points: 0

Question Figure: Comparing Long-Run Equilibriums

Reference: Ref 15-14

(Figure: Comparing Long-Run Equilibriums) In the figure Comparing Long-Run Equilibriums, which of the

following statements is false?

Answer The firm in panel a produces where price equals marginal cost, and thus it maximizes profit and

breaks even.

179. Multiple Choice: Figure: Comparing Long-Run Equilibriu...

Question Figure: Comparing Long-Run Equilibriums

Reference: Ref 15-14

(Figure: Comparing Long-Run Equilibriums) In the figure Comparing Long-Run Equilibriums, which of the

following statements is true?

Answer The major difference between panel a and panel b is that firms in the market structure shown in panel

a cannot have excess profits in the long run, but the firms in the market structure shown in panel b

can have excess profits in the long run.

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180. Multiple Choice: Figure: Comparing Long-Run Equilibriu...

Question Figure: Comparing Long-Run Equilibriums

Reference: Ref 15-14

(Figure: Comparing Long-Run Equilibriums) In the figure Comparing Long-Run Equilibriums, which of the

following statements is false?

181. Multiple Choice: Monopolistic competition within an in...

Question Monopolistic competition within an industry will result in ________, because firms produce ________.

Answer the overutilization of plants; the minimum-cost output

182. Multiple Choice: When the profit-maximizing level of o…

Question When the profit-maximizing level of output is less than the output associated with the minimum possible

average total cost of production, a firm is said to have:

Answer economic profits.

183. Multiple Choice: Which of the following is true?

Question Which of the following is true?

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184. Multiple Choice: Monopolistic competition is different...

Question Monopolistic competition is different from perfect competition because in monopolistic competition:

185. Multiple Choice: Two firms, firm A and firm B, have id...

Question Two firms, firm A and firm B, have identical cost curves. Firm A operates in perfect competition and firm B

operates in monopolistic competition. In the long run, what can we say about the price and output that

each firm charges?

186. Multiple Choice: Monopolistically competitive firms pr...

Question Monopolistically competitive firms produce less than the output at which average total cost is minimized in

the long run. As a result, there is:

Answer irrational capacity.

187. Multiple Choice: The excess capacity in monopolistic c…

Question The excess capacity in monopolistic competition may be viewed as:

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