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