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Considering perfect competition, monopolistic competition, and monopoly, which of the market structures features entry in the long run?

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perfect co...

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A monopolistically competitive firm faces the following demand curve for its product: A monopolistically competitive firm faces the following demand curve for its product: The firm has total fixed costs of $100 and a constant marginal cost of $25 per unit. The firm will maximize profit with the production of A) 4 units of output. B) 10 units of output. C) 16 units of output. D) 22 units of output. The firm has total fixed costs of $100 and a constant marginal cost of $25 per unit. The firm will maximize profit with the production of


A) 4 units of output.
B) 10 units of output.
C) 16 units of output.
D) 22 units of output.

E) B) and C)
F) C) and D)

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Table 16-7 A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to 20. Table 16-7 A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to 20. -Refer to Table 16-7. When this firm profit maximizes and faces a constant marginal cost of $7, what is the amount of its markup over marginal cost? -Refer to Table 16-7. When this firm profit maximizes and faces a constant marginal cost of $7, what is the amount of its markup over marginal cost?

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In a market that is characterized by imperfect competition,


A) firms are price takers.
B) there are always a large number of firms.
C) there are at least a few firms that compete with one another.
D) the actions of one firm in the market never have any impact on the other firms' profits.

E) None of the above
F) C) and D)

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In a long-run equilibrium, both perfectly competitive markets and monopolistically competitive markets have price equal to average total cost.

A) True
B) False

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Which of the following is an example of a monopolistically competitive industry?


A) computer operating systems
B) wheat
C) movies
D) cable television

E) A) and B)
F) B) and D)

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Figure 16-10 The figure is drawn for a monopolistically-competitive firm. Figure 16-10 The figure is drawn for a monopolistically-competitive firm. -Refer to Figure 16-10. In order to maximize its profit, the firm will choose to produce A) 100 units of output, and its profit will be negative. B) 100 units of output, and its profit will be zero. C) 133.33 units of output, and its profit will be negative. D) 133.33 units of output, and its profit will be zero. -Refer to Figure 16-10. In order to maximize its profit, the firm will choose to produce


A) 100 units of output, and its profit will be negative.
B) 100 units of output, and its profit will be zero.
C) 133.33 units of output, and its profit will be negative.
D) 133.33 units of output, and its profit will be zero.

E) A) and B)
F) None of the above

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Table 16-6 Beatrice's Birthday Cakes is one bakery among many in the market for birthday cakes. The following table presents cost and revenue data for birthday cakes at Beatrice's. Table 16-6 Beatrice's Birthday Cakes is one bakery among many in the market for birthday cakes. The following table presents cost and revenue data for birthday cakes at Beatrice's. -Refer to Table 16-6. If the government forced Beatrice's to produce at the efficient scale of output, what is the maximum profit Beatrice's could earn? A) $59 B) $67 C) $101 D) $126 -Refer to Table 16-6. If the government forced Beatrice's to produce at the efficient scale of output, what is the maximum profit Beatrice's could earn?


A) $59
B) $67
C) $101
D) $126

E) None of the above
F) All of the above

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Figure 16-13 Figure 16-13 -Refer to Figure 16-13. What is the first step in this industry's adjustment to long run equilibrium? -Refer to Figure 16-13. What is the first step in this industry's adjustment to long run equilibrium?

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Which type of market structure has the fewest number of firms?

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A concentration ratio


A) measures the percentage of total output supplied by the four largest firms in the industry.
B) reflects the level of competition in an industry.
C) is related to the control that each firm has over price.
D) All of the above are correct.

E) All of the above
F) None of the above

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Use a graph to demonstrate why a profit-maximizing monopolistically competitive firm must operate at excess capacity. Explain why a perfectly competitive firm is not subject to the same constraint.

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blured image Competitive firms do not face downward-...

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A concentration ratio


A) measures the percentage of total sales of the top firm in the industry.
B) reflects the level of competition in an industry.
C) is inversely related to the price charged by the top firm in the industry.
D) All of the above are correct.

E) C) and D)
F) All of the above

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A market structure in which there are many firms selling products that are similar but not identical is known as


A) oligopoly.
B) monopoly.
C) monopolistic competition.
D) perfect competition.

E) A) and D)
F) C) and D)

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If we observe a great deal of advertising of men's shaving products, we can infer that


A) the market for those products is perfectly competitive.
B) it costs firms very little to produce those products.
C) those products are highly differentiated.
D) firms are irrational in their decisions to advertise.

E) A) and B)
F) None of the above

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According to the signaling theory of advertising, consumers


A) pay little or no attention to which firms advertise and which firms do not advertise.
B) are often more impressed by a firm's willingness to spend money on advertising than they are by the content of the advertisement.
C) are often more impressed by low-cost advertisements than they are by high-cost advertisements.
D) gain little or no information about product quality from advertisements.

E) All of the above
F) B) and C)

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Monopolistically competitive firms could reduce the average total cost of producing by increasing output; therefore, these firms have

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Entry of new firms in monopolistically competitive industries can convey a positive externality on consumers because new products result in more consumer surplus. This externality is called the

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product-va...

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​In the long run, a monopolistically competitive firm produces at efficient scale.

A) True
B) False

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If a monopolistically competitive firm can increase its level of production and lower its average total cost of production at the same time then


A) the firm has a product-variety opportunity.
B) the firm has excess capacity.
C) the firm has a business-stealing opportunity.
D) the firm is producing a quantity of output higher than its efficient scale of production.

E) B) and D)
F) B) and C)

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