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Which of the following is a characteristic of monopolistic competition? |
free entry |
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A firm in a monopolistically competitive market faces a |
downward-sloping demand curve because the firm’s product is different from those offered by other firms |
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In the shop run, a firm in a monopolistically competitive market operate much like a |
monopolist |
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In a monopolistically competitive industry, firms set price |
above marginal cost since each firm is a price setter |
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A profit-maximizing firm in a monopolistically competitive market differs from a firm in a perfectly competitive market because the firm in the monopolistically competitive market |
faces a downward-sloping demand curve for its product. |
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A monopolistically competitive firm chooses |
the quantity of output to produce and the price at which it will sell its output. |
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A monopolistically competitive firm’s choice of output level is virtually identical to the choice made by |
a monopolist |
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Because monopolistically competitive firms produce differentiated products, each firm |
has some control over product price |
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A monopolistically competitive firm chooses the quantity to produce where |
marginal revenue equals marginal cost |
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A profit-maximizing firm in a monopolistically competitive market is characterized by which of the following? |
price exceeds marginal cost |
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The firm has total fixed costs of $20 and a constant marginal cost of $18 per unit. The firm will maximize profit with |
15 units of output |
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If "too much choice" is a problem for consumers, it would occur in which market structure(s)? |
monopolistic competition |
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Which of the following is not a key feature of monopolistic competition? |
Positive economic profits for firms in the long run |
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If firms in a monopolistically competitive market are earning positive profits, then |
new firms will enter the market |
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In monopolistically competitive markets, economic losses |
suggest that some existing firms will exit the market |
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The free entry and exit of firms in a monopolistically competitive market guarantees that |
both economic profits and economic losses disappear in the long run |
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"In a long-run equilibrium, price is equal to average total cost." This statement applies to |
competitive and monopolistically competitive markets, but not to monopolies |
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In the long run, |
both monopolistically competitive and perfectly competitive firms produce where P = ATC |
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The primary claim of defenders of advertising is that it |
enhances the information available to consumers. |
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Critics of markets that are characterized by firms that sell brand name products argue that brand names encourage consumers to pay more for branded products that |
are indistinguishable from generic products |
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