module 10 learnsmart ECO2023
monopolistic competition and a monopoly are
not the same market structure
the graph shows the marginal cost and the average total cost curves for a typical firm competing in the monopolistically competitive market for frozen foods the long run equilibrium would occur at an output level of _ thousand cases, and the price would be _
4 6.5
the graph shows the marginal cost and the average total cost curves for a typical firm competing in the monopolistically competitive market for frozen foods to maximize profits, the firm should produce _ thousand cases of frozen food to maximize profits, this firm should charge _
5 9
for monopolistically competitive firms, _ their products is important because many consumers do not like taking risks, and this way they can learn about products before buying them
branding
monopolistically competitive markets
combine characteristics of competitive markets and pure monopolies
a number of entry barriers are present in oligopolistic markets, including
control of the resources needed to produce output economies of scale that may allow only a small number of firms to operate in a market pricing strategies patents significant costs of capital
determine how each of the events listed below would affect the demand curve for food at Steve's Shrimp Shack, a seafood restaurant operating in a monopolistically competitive restaurant market. The demand could increase (rightward short) or decrease (leftward shift), and it also could become more or less elastic the number of other restaurant in the area increases Steve institutes a frequent-diner program whereby a customer who visits five times receives a sixth meal free the number of consumers in the area increases
decreases; more elastic increases; less elastic increases; no impact
because the products of monopolistically competitive firms are _ from other companies in their industry, they face a _ sloping demand curve
differentiated downward
when monopolistically competitive firms realize losses in the short run, some firms will _ the industry, _ market shares and prices and eliminating losses for the remaining firms
exit increasing
total revenue minus the _ and _ costs of production is economic profit
implicit explicit
the level of profit that occurs when the total revenue is less than the total cost is known as a _
loss
Allocative efficiency occurs when
marginal benefit = marginal cost
in a _ competitive market, consumers can usually find exactly what they are looking for based on their preferences and budgets
monopolistic
producers operating in oligopolistic markets generate
normal profits and even losses in the short run
for each of the markets listed below, determine whether the market can reasonably be described as monopolistically competitive or not satellite radio AM or FM radio common salt clothing shampoo
not monopolistically competitive not monopolistically competitive monopolistically competitive
the behavior followed by _ firms needs to be strategic, given that they face other competitors in the market
oligopolistic
when there is productive efficiency:
output is produced using the fewest resources possible to produce a good or a service output is produced at the lowest possible total cost per unit of production
a monopolistically competitive firm should produce output until the marginal _ equals the marginal _
revenue cost
profit maximization implies that monopolistically competitive firms should expand production up to the point where the marginal revenue equals the marginal cost
true
a clear benefit to monopolistic competition for consumers is product _
variety
laws designed to prevent firms from engaging in behaviors that would lessen competitive in a market are called
antitrust laws
to calculate profit, which three pieces of information must be identified?
average total cost quantity of output price
the strategy of distinguishing one firms product from the competing products of other firms is called product _
differentiation
which of the following are the four characteristics of a perfectly competitive market?
easy entry and exit standardized product producers who are price takers large number of buyers and sellers
monopolistic competition and perfect competition have one main characteristic in common: relatively easy market _ and _
entry exit
a market structure characterized by a relatively large number of sellers producing a differentiated product, for which they have some control over the price they charge, in a market with relatively easy market entry and exit is known as
monopolistic competition
because _ competitive firms have some control over prices, the firms will charge consumers the price they are willing and able to pay for the available output, which is found by projecting the profit-maximizing output level onto the _ curve
monopolistically demand
_ competitive firms have an incentive to continuously improve and differentiate their products to have more control over their prices and to earn more _ profit
monopolistically economic
_ interdependence is a situation in which the strategy followed by one producer will likely affect the profits and behavior of another producer
mutual
monopolistically competitive firms are unable to produce enough output to reach the minimum average total cost because of the:
presence of other monopolistically competitive firms in the industry
in an oligopoly
producers may or may not earn economic profits
consider the monopolistically competitive firm represented in the graph. The firm begins in long run equilibrium, generating a normal profit. suppose there is a large increase in demand in the overall market, resulting in an increase in demand for this firm's product. The demand and the marginal revenue curves will once the demand for this firms product increases, the new profit maximizing level of output and price for the firm with an increase in demand, the firm will generate an economic in the long run, other firms will _ this market
shift to the right will be higher than the original profit enter
in monopolistically competitive markets, which of the following allow consumers to be more responsive to price changes
the availability of close substitutes