(ECON 105) Quiz 17
A differentiated product has
close but not perfect substitutes.
The major difference between monopolistic competition and monopoly is
only a monopoly can make an economic profit in the long run.
A firm is spending the profit-maximizing amount on product development when
the marginal cost of product development is equal to the marginal revenue from product development.
Which of the following four-firm concentration ratios would be the best indicator of an oligopoly?
78 percent
The square of the percentage market share of each firm summed over the 50 largest firms in a market is the
Herfindahl-Hirschman Index.
Which of the following is TRUE about a firm in monopolistic competition in the long run?
P = ATC
Concentration ratios
measure whether the market is dominated by a small number of firms.
What does monopolistic competition have in common with monopoly?
a downward-sloping demand curve
The marginal revenue curve facing a monopolistically competitive firm
lies below its demand curve.
A market is considered competitive if the Herfindahl-Hirschman Index (HHI) is ________ and its four-firm concentration ratio is ________.
low; low