Monopolist comp, oligopoly

higher, deadweight loss

In the long run, monopolistically competitive firms charge prices __________________ than marginal cost to produce _________________ _____________

Perfect competition

In which of the following market structures is marginal cost equal to average total cost in long-run equilibrium?

model of oligopoly

Interdependence of pricing decisions is a characteristic of the:

There is easy entry and exit in both

Monopolistic competition is similar to perfect competition in that:

Productively or allocatively efficient

Monopolistically competitive equilibrium is NOT ____________________ or ____________________ _____________________ in the long run.

long run

Monopolistically competitive firms recognize a normal profit in the...

Average total cost, quantity of output, price

To calculate profit, what three pieces of information must be identified?

P=ATC

What indicates a normal profit in a monopolistic competition?

P<ATC

What indicates an economic loss in monopolistic competition?

P>ATC

What indicates economic profit in monopolistic competition?

5200 pairs of sunglasses

What is the allocatively efficient number of sunglasses in this market?

where MR=MC

Where do monopolistic competitions produce in the short run?

Producers who are price takers.

Which of the following is not a characteristic of an oligopoly?

start up costs

Which of the following is not an entry barrier in oligopolistic markets?

Some consumers might choose to purchase close substitutes from another firm in the industries.

Why do monopolistic competitions experience a larger decline in demand than a purely monopolistic firm.

monopolistically competitive

A highly competitive market consisting of many firms selling differentiated products is:

mutually interdependent

A manufacturers profits predetermined not only by its decisions but also by the decisions of other firms in the industry. This is why we say that oligopolistic firms are :

monopolistic

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 entry and exit is known as __________________ competition.

cost, revenue

A monopolistically competitive firm should produce output until the marginal __________ equals the marginal __________

Enter

After all firms experience increased demand, you expect to see other firms ___________ this market.

Marginal benefit equals marginal cost

Allocative efficiency occurs when:

oligopoly

An __________ is a market structure with just a few producers

Does not

And increase in the # of consumers (does/does not) have an impact on elasticity.

Short run economic profits

Assume most of the firms in the market experience the same increase in demand. The change will result in the firms'

monopolistic, below

Because _____________competitive firms face a downward sloping demand curve, the marginal revenue curve lies _____________ the demand curve

Different, prices

Because the products of monopolistically competitive firms are ____________ from other companies in their industry, these firms are able to have some control over the ___________ of their products.

monopolistically

For _______________ competitive firms, branding serves as a signal to consumers about the products they are going to purchase.

A normal profit

Carl earns....

Oligopoly

Collusion is most likely occur in a(n):

Monopolistically competitive

Consumers are more responsive to price changes under which type of firm?

economic profits, losses or a normal profit

Depending on the demand for a monopolistically competitive firms product, it may have:

Airlines

Example of an oligopoly

monopolistically

For _________________ competitive firms, branding is important because many consumers do not like taking risks

P>ATC

For a monopolistic competitor ___________ in long-run equilibrium..

consumers

For monopolistically competitive firms, branding serves as a signal to _________________ about the products they are going to purchase.

120

How much are consumers willing to pay for the 4400th pair of sunglasses?

game

___________ theory helps us study the strategic behavior of oligopolistic firms

economic

_______________ profit creates an incentive for other monopolistically competitive firms to enter the market.

40

How much must suppliers charge for the 4400th pair of sunglasses?

excess capacity to produce

IF the point where demand and ATC intersect is on the downscoping portion of the ATC curve, there is...

more

If there are more substitutes for a product the (more/less) elastic the demand,

barriers to entry

Impediments that prevent firms from entering a market or an industry are known as

is less than that in a monopolistic competition

In a market with monopoly the output produced

excess capacity to produce

In a monopolistically competitive firm, the firm has...

adjust output until marginal revenue equals marginal cost

In a monopolistically competitive industry, profit-maximizing firms:

Elastic, inelastic

In a monopolistically competitive market, the closer the substitutes are for a product, the more _________________ its demand will be; the more rare or unusual a product is the _________________ its demand will be.

strategic

Oligopolistic firms can influence the prices they charge for their products, but their behavior needs to be ________________, given act they face other competitors in their

mutually interdependent

Oligopolys are considered to be __________________ __________________

makers

Oligopolys are price _______________

monopolistically, consumers

One common feature of _________________ competitive markets is that firms invest heavily in product development and innovation, which benefits ___________ greatly.

profits, losses

Producers operating in oligopolistic markets can generate normal _____________ and even __________ in the short run

Productive efficiency

Producing output at the lowest possible total cost per unit of production is _____________ ______________

allocative efficiency

Producing the goods and services that consumers most want in such a way that marginal benefit equals marginal cost is

maximization

Profit _____________ implies that monopolistically competitive firms should expand production up to the point where the marginal revenue equals the marginal cost.

80 (marginal benefit is 120, marginal cost is 40 for a difference of 80)

What is the difference between the marginal benefit of the 4400th pair of sunglasses and the marginal cost of that pair of sunglasses?

The point where MC=ATC

What point indicates levels of output that minimize ATC?

The presence of more monopolistically competitive firms in the market

What prevents producers from producing the output amount that would allow the firm to reach the quantity that produces the minimum ATC?

oligopoly

When a monopolistic competition firm becomes bigger and bigger it develops into an

collusion

When firms, individuals, or any group of economic actors engage in ________________, they coordinate their actions to achieve a desired outcome.

productive efficiency

When there is _____________________ _______________________ output is produced using the fewest resources possible to produce a good or service

more

When there is increased competition, a products demand becomes _________ elastic

produced at the lowest possible total cost per unit of production

When there is productive efficiency in a firm, output is...

Right, advertising costs, more

Since advertising costs money...the firm MUST shift their demand curve to the _________ by as much as their ___________ __________ or _______

2.50

Suppose Car'ls candies sells 100 boxes of candy for $5 each. The total fixed cost of the boxes is $100 and the average variable cost of the 100 boxes is $1.50 per box. Carl's makes a profit per unit of.

$250

Suppose Car's Candies sells 100 boxes of candy for $5 each. The total fixed cost of the 100 boxes is $100, and the average variable cost of the 100 boxes is $1.50 per box. Carl makes a total profit of:

The restaurant industry

The best example of monopolistic competition is:

oligopoly

In an ______________, producers are price makers and behave strategically when making decisions related to the features, prices, and advertising of their products.

Firms will exit, curve shifts right (more customers available per establishment)

In an oligopoly, if there is a loss in the short run...

Firms will enter and the curve shifts left (lose customers)

In an oligopoly, if there is profit in the short run...

is equal to average total cost

In long run equilibrium for a monopolistically competitive firm, price:

long run

In the __________ __________ a monopolistically competitive firm will charge a price equal to the average total cost per unit produced

realize normal profits (P=ATC)

In the long run equilibrium monopolistically competitive firms...

At MR=MC

In the long run of a monopolistically competitive firm, where does the firm produce?

entry

In the long run, economic profits will entice ________________ to the market

economic loss

In the short run, this firm will earn an ________________

is less than price

Marginal revenue for a monopolistically competitive firm

easy

Monopolistic competition and perfect competition have one main characteristic in common: relatively _________ market entry and exit.

entry and exit

Monopolistic competition and perfect competition have one main characteristic in common: relatively easy market ___________- and ____________

zero, a normal profit

Suppose Carl's candies sells 200 boxes of candy for $5 each. The total fixed cost of the 20 boxes is $200 and the average variable cost of the 200 boxes is $4 per box. Carl earns _________

Shifts to the right

Suppose the demand increases by 2000 cases at every price, what happens to the new demand curve?

Deadweight loss

The difference between the economic surplus when the market is at its competitive equilibrium and the economic surplus when the market is not in equilibrium is the:

strategic decision making

The economic model of oligopoly assumes that firms use:

equal

The level of profit that occurs when total revenue is _____________ to the total cost is known as normal profit.

higher

The price customers are willing and able to pay in a monopolistic competition is ____________ than the price that would be charged by an allocatively efficient competitive firm.

More inelastic

The purpose of advertising is to make the demand for one's product

Differentiation

The strategy of distinguishing one firm's product from the competing products of other firms is called product _________________.

Interdependent

The theory of games is helpful in understanding the behavior of firms whose decisions are:

Fall

These market changes will cause the market price ____________ in the long run

raise the market price by reducing output and limit entry into the market

To be successful in increasing combined profits, members of a cartel must:

significant costs of capital, patents, price and strategy

What are some barriers of entry of oligopoly