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188. Multiple Choice: Because monopolistically competitive ...
Question Because monopolistically competitive firms charge a P > MC:
Answer monopolistic competition is efficient.
189. Multiple Choice: Which of the following is true?
Question Which of the following is true?
Answer Monopolistic competition and perfect competition are both inefficient.
190. Multiple Choice: In long-run equilibrium, a firm in mo...
Question In long-run equilibrium, a firm in monopolistic competition is similar to a monopoly because it
Answer earns no economic profit.
191. Multiple Choice: The problem of wasteful duplication i...
Question The problem of wasteful duplication in monopolistic competition is due to:
192. Multiple Choice: Excess capacity is a problem in monop...
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Question Excess capacity is a problem in monopolistic competition because if there were fewer firms in the industry
193. Multiple Choice: Which of the following is true of fir...
Question Which of the following is true of firms in both perfect competition and monopolistic competition?
Answer The long-run price is equal to marginal revenue, marginal cost, and average total cost.
194. Multiple Choice: In long-run equilibrium in perfect co...
Question In long-run equilibrium in perfect competition:
Answer marginal cost is greater than price.
195. Multiple Choice: In long-run equilibrium in monopolist...
Question In long-run equilibrium in monopolistic competition:
Answer marginal cost is greater than price.
196. Multiple Choice: In long-run equilibrium in perfect co...
Question In long-run equilibrium in perfect competition:
Answer price is greater than average total cost.
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197. Multiple Choice: In long-run equilibrium in monopolist...
Question In long-run equilibrium in monopolistic competition:
Answer price is greater than average total cost
198. Multiple Choice: Which of the following advertising sc...
Question Which of the following advertising scenarios is likely to provide the least amount of economic usefulness?
199. Multiple Choice: A monopolistic competitor is likely t...
Question A monopolistic competitor is likely to engage in advertising to:
Answer create a greater perception of product differentiation in the minds of potential consumers.
200. Multiple Choice: Which of the following advertising sl...
Question Which of the following advertising slogans provides information to potential buyers?
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201. Multiple Choice: Some economists think that advertisin...
Question Some economists think that advertising is a waste of resources because:
202. Multiple Choice: Advertising is an economically produc...
Question Advertising is an economically productive activity and not a waste of resources because:
203. Multiple Choice: Monopolistic competitors often hire a...
Question Monopolistic competitors often hire a celebrity spokesperson to advertise their product. One explanation for
why such advertising works is that:
204. Multiple Choice: Budweiser is a brand name that many p...
Question Budweiser is a brand name that many people recognize. During the Super Bowl each year, this beer
company has many of the most successful ads. Which of the following is true about advertising for
Budweiser?
205. Multiple Choice: Which of the following is true?
Question Which of the following is true?
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206. Multiple Choice: Critics of advertising argue that it:
Question Critics of advertising argue that it:
207. Multiple Choice: Those who are critical of advertising...
Question Those who are critical of advertising argue that it:
Answer tends to make markets behave more like perfectly competitive markets.
208. Multiple Choice: Defenders of advertising argue that it:
Question Defenders of advertising argue that it:
Answer seeks to persuade rather than inform buyers.
209. Multiple Choice: Advertising is an economically produc...
Question Advertising is an economically productive activity and not a waste of resources because:
Answer advertisements increase sales.
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210. Multiple Choice: Which of the following is correct abo...
Question Which of the following is correct about celebrity spokespersons advertising products?
Answer Celebrities are better informed about the relative merits of different products than the rest of us.
211. Multiple Choice: Among the drawbacks of brand names is...
Question Among the drawbacks of brand names is the fact that:
212. Multiple Choice: Reference: Ref 15-15 (Table: Spring...
Question
Reference: Ref 15-15
(Table: Spring Water) The table Spring Water shows the demand and cost data for a firm in a
monopolistically competitive industry producing drinking water from underground springs. The profit-
maximizing output is _______ cases.
Answer 5
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213. Multiple Choice: Reference: Ref 15-15 (Table: Spring...
Question
Reference: Ref 15-15
(Table: Spring Water) The table Spring Water shows the demand and cost data for a firm in a
monopolistically competitive industry producing drinking water from underground springs. The profit-
maximizing price is:
214. Multiple Choice: Reference: Ref 15-15 (Table: Spring...
Question
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Reference: Ref 15-15
(Table: Spring Water) The table Spring Water shows the demand and cost data for a firm in a
monopolistically competitive industry producing drinking water from underground springs. At the profit-
maximizing output, profit is:
Answer $8.83.
215. Multiple Choice: Reference: Ref 15-15 (Table: Spring...
Question
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Reference: Ref 15-15
(Table: Spring Water) The table Spring Water shows the demand and cost data for a firm in a
monopolistically competitive industry producing drinking water from underground springs. At the profit-
maximizing output, profit per unit is:
216. Multiple Choice: Reference: Ref 15-15 (Table: Spring...
Question
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Reference: Ref 15-15
(Table: Spring Water) The table Spring Water shows the demand and cost data for a firm in a
monopolistically competitive industry producing drinking water from underground springs. If the industry
were perfect competition, the profit-maximizing output would be ________ cases.
Answer 6
217. Multiple Choice: Reference: Ref 15-15 (Table: Spring...
Question
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Reference: Ref 15-15
(Table: Spring Water) The table Spring Water shows the demand and cost data for a firm in a
monopolistically competitive industry producing drinking water from underground springs. If the industry
were perfect competition, the profit-maximizing price would be:
218. Multiple Choice: Industries that are made up of many c...
Question Industries that are made up of many competing producers, each selling a differentiated product, and whose
firms eventually earn zero economic profits in the long run are:
Answer perfectly competitive.
219. Multiple Choice: When Henry Ford produced his cars, he...
Question When Henry Ford produced his cars, he ________, while GM produced its cars ________.
Answer maximized economies of scale; by also maximizing economies of scale
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220. Multiple Choice: Monopolistic competitors:
Question Monopolistic competitors:
221. Multiple Choice: Monopolistic competitors sell product...
Question Monopolistic competitors sell products that are ________ and as a result, each firm has a ________
demand curve.
222. Multiple Choice: Figure: Monopolistic Competitor Refer...
Question Figure: Monopolistic Competitor
Reference: Ref 15-16
(Figure: Monopolistic Competitor) If the firm shown in the figure Monopolistic Competitor profit-maximizes,
it will:
223. Multiple Choice: Consumers' differing tastes are one r...
Question Consumers' differing tastes are one reason why monopolistic:
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224. Multiple Choice: In the long run, monopolistic competi...
Question In the long run, monopolistic competitors will:
225. Multiple Choice: Scenario: Monopolistically Competitiv...
Question Scenario: Monopolistically Competitive Firm
A monopolistically competitive firm's demand for its product is equal to Q = 160 – P, and its MC curve is
equal to MC = 20 + 2Q. Its TC curve is as follows: TC = 20Q + Q2 + 20.
Reference: Ref 15-17
(Scenario: Monopolistically Competitive Firm) Given the information in the scenario Monopolistically
Competitive Firm, what is the fixed cost for this firm?
226. Multiple Choice: Scenario: Monopolistically Competitiv...
Question Scenario: Monopolistically Competitive Firm
A monopolistically competitive firm's demand for its product is equal to Q = 160 – P, and its MC curve is
equal to MC = 20 + 2Q. Its TC curve is as follows: TC = 20Q + Q2 + 20.
Reference: Ref 15-17
(Scenario: Monopolistically Competitive Firm) Given the information in the scenario Monopolistically
Competitive Firm, what is the profit-maximizing level of output for this firm in the short run?
227. Multiple Choice: Scenario: Monopolistically Competitiv...
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Question Scenario: Monopolistically Competitive Firm
A monopolistically competitive firm's demand for its product is equal to Q = 160 – P, and its MC curve is
equal to MC = 20 + 2Q. Its TC curve is as follows: TC = 20Q + Q2 + 20.
Reference: Ref 15-17
(Scenario: Monopolistically Competitive Firm) Given the information in the scenario Monopolistically
Competitive Firm, what is the profit-maximizing price for this firm?
228. Multiple Choice: Scenario: Monopolistically Competitiv...
Question Scenario: Monopolistically Competitive Firm
A monopolistically competitive firm's demand for its product is equal to Q = 160 – P, and its MC curve is
equal to MC = 20 + 2Q. Its TC curve is as follows: TC = 20Q + Q2 + 20.
Reference: Ref 15-17
(Scenario: Monopolistically Competitive Firm) Given the information in the scenario Monopolistically
Competitive Firm, in the short run, this firm:
229. Multiple Choice: Scenario: Monopolistically Competitiv...
Question Scenario: Monopolistically Competitive Firm
A monopolistically competitive firm's demand for its product is equal to Q = 160 – P, and its MC curve is
equal to MC = 20 + 2Q. Its TC curve is as follows: TC = 20Q + Q2 + 20.
Reference: Ref 15-17
(Scenario: Monopolistically Competitive Firm) Given the information in the scenario Monopolistically
Competitive Firm, in the long run, this firm can expect that:
230. Multiple Choice: Monopolistically competitive firms:
Question Monopolistically competitive firms:
Answer engage in collusive activity in order to maximize profit.
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231. Multiple Choice: In the long run, perfect competitors ...
Question In the long run, perfect competitors and monopolistic competitors are similar in that they:
Answer set price where MR < MC.
232. Multiple Choice: Both monopolists and monopolistic com...
Question Both monopolists and monopolistic competitors:
Answer make positive economic profits in the long run.
233. Multiple Choice: Perfect competitors and monopolistic ...
Question Perfect competitors and monopolistic competitors both earn ________ economic profit in the long run, but
perfect competitors produce at the ________ of the ATC curve, while monopolistic competitors produce
________ of the ATC curve.
234. Multiple Choice: A monopolistic competitor will engage...
Question A monopolistic competitor will engage in advertising in order to:
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235. Multiple Choice: Figure: Monopolistic Competitor Refer...
Question Figure: Monopolistic Competitor
Reference: Ref 15-18
(Figure: Monopolistic Competitor) The firm shown in the figure Monopolistic Competitor may engage in
advertising because:
236. Multiple Choice: Figure: Monopolistic Competitor Refer...
Question Figure: Monopolistic Competitor
Reference: Ref 15-18
(Figure: Monopolistic Competitor) If the firm shown in the figure Monopolistic Competitor produces at its
profit-maximizing level, it will produce:
237. Essay: Monopolistic competition is a market ...
Question
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Monopolistic competition is a market structure that shares some characteristics with perfect competition
and monopoly. Explain where these market structures are similar and where they differ.
238. Essay: A university town has many clothing r...
Question A university town has many clothing retailers. Some of the stores sell sweatshirts and T-shirts to college
students, and other stores sell suits, sport coats, and business casual wear to college professors. How are
these retail stores differentiating the products that they sell?
239. Essay: Your friend Stan owns a coffee shop i...
Question Your friend Stan owns a coffee shop in a town with many competing coffee shops in a monopolistically
competitive industry. One day Stan tells you (an economist) that he is earning an economic profit and is
currently setting his price equal to his marginal cost. Is Stan producing the profit-maximizing amount of
coffee? What should he do?
240. Essay: A monopolistically competitive firm i...
Question A monopolistically competitive firm is operating in the short run, is operating at the optimal level of output,
and is earning positive economic profits. Describe how this industry will adjust in the long run.
241. Essay: A monopolistically competitive firm i...
Question A monopolistically competitive firm is operating in the short run at the optimal level of output and earns
negative economic profits. Describe how this industry will adjust in the long run.
242. Essay: Your friend Angelina is the owner of ...
Question Your friend Angelina is the owner of a boutique clothing store in a monopolistically competitive clothing
market. The market is in long-run equilibrium. Over coffee, Angelina tells you that she is considering raising
the price of her clothing to increase her profits. What is your advice?
243. Essay: Consider the demand curve for a firm ...
Question Consider the demand curve for a firm in perfect competition, a firm in monopolistic competition, and a
monopolist. Which is likely to be the least elastic and which is likely to be the most elastic? Explain.
Answer
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244. Essay: Which industry type, perfect competit...
Question Which industry type, perfect competition or monopolistic competition, produces the least deadweight loss?
Which industry type is preferred by society? Explain.
245. Essay: Do economists consider advertising to...
Question Do economists consider advertising to be an economically productive activity? Explain.
246. Essay: Why are some consumers willing to pay...
Question Why are some consumers willing to pay more for a bottle of Advil than they are willing to pay for a bottle of
ibuprofen tablets, when ibuprofen is the pain-relieving ingredient found in Advil?
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