Monopolistic Competition!

Front

Which of the following statements correctly identifies a difference between perfect competition and monopolistic competition?

Back

In perfect competition the firms all sell products that are exactly the same, but in monopolistic competition each firm sells a slightly differentiated product.

Front

Monopolistically competitive firms are considered inefficient in allocating society’s resources for which of the following reasons? In long-run equilibrium, the price is greater than the marginal cost.

Back

In long-run equilibrium, the price is greater than the marginal cost.

Front

Which of the following market structures results in allocative efficiency? Monopoly, Monopolistic Competition, Perfect Competition, Oligopoly

Back

Perfect Competition

Front

Which of the following is true of a monopolistically competitive firm in long-run equilibrium? Price equals marginal cost and average total cost, Price equals average total cost but is greater than marginal cost, Price equals marginal cost and is greater than average total cost, The firm earns positive economic profits by producing at minimum average cost.

Back

Price equals average total cost but is greater than marginal cost.

Front

The demand curve for a monopolistically competitive firm is downward sloping because:

Back

the products produced by different firms are not identical

Front

The graph shows a monopolistically competitive firm:

Back

making a profit in the short-run

Front

In the long-run, the ATC will be tangent to the demand curve at: Q1, Q2, Q3, none of the above

Back

Q1

Front

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

Back

The firm is allocatively inefficient, because it produces an output level at which price is greater than marginal cost.

Front

In monopolistic competition, which of the following most accurately describes the long-run equilibrium conditions for a firm? P=ATC, MR=MC, and P>MC

Back

P=ATC, MR=MC, and P>MC

Front

A monopolistically competitive firm advertises in order to:

Back

make the demand for its product less price elastic