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monopolistic competition is an industry characterized by a:

large number of firms producing similar products, with relatively easy entry for firms.

Which of the following is not an assumption economists make using the model of perfect competition?

Each firm sets its price equal to its average total cost

The ability of a monopolist to raise the price of a product above the competitive level by reducing the output is known as:

Market power

A _______ is a single firm with ________, whereas ________ implies an industry with ___________ firms that has(have) _________

Monoply: barriers to entry; monopolistic competition; many; easy entry and exit

(Table) Lenoia runs a natural monopoly producing electricity for a small mountain village. The table shows Lenoia's demand and total cost of producing electricity. The price effect of increasing production from 3 megawatts is:

-$150

(Table) during the winter, Alexa runs a snow-clearing service, and snow-clearing is a perfectly competitive industry, her only fixed cost is $1,000 for a tractor. Her variable costs per cleared lot, shown in the table, include fuel and hot coffee. If the current price per cleared lot is $14, how many lots should Alexa clear?

0

(Table) prof. Dumbledorr has a monopoly on magic hats. He sells at most one hat to each costumer, and the table shows each customer's willingness to pay. The marginal cost of producing a hat is $18. How many hats should prof. Dumbledorr produce, and what price should he charge to maximize his profits?

3; $24

(Figure) in the figure, of the price is p1, then the firm earns:

A loss equal to (ca) Q1

A monopoly is a market characterized by:

A single seller

The most important source of oligopoly is

Economies of scale

For the Colorado beef industry to be classified as perfectly competitive, ranchers in Colorado must have ______ on prices and beef is a ______ product

No noticiable effect; standardized

The market structure characterized by a few interdependent firms and in which there are barriers to entry is called:

Oligoply

Which of the following is NOT a characteristic of monopolistic competition?

Tactic collusion

The perfectly competitive model assumes all of the following except:

That firms attempt to maximizs their total revenue

The downward-sloping demand curve for a monopolistically competitive firm:

reflects product differentiation

(Table) during the winter, Alexa runs a snow-clearing service, and snow-clearing is a perfectly competitive industry, her only fixed cost is $1,000 for a tractor. Her variable costs per cleared lot, shown in the table, include fuel and hot coffee. What is Alexa's shut-down price in the short run?

$15

(Table) Lenoia runs a natural monopoly producing electricity for a small mountain village. The table shows Lenoia's demand and total cost of producing electricity. The marginal revenue of the fourth unit of production is:

$250

Which of the following are true conceding monopoly?

All of the starments are true

Conditions that prevent the entry of new firms in a monopoly market are:

Barriers to entry

If your farm has the only known source of a rare cocoa bean needed to make chocolate-covered peanuts, your monopoly would result from:

Control of a scarce resource or input

monoplistic competition is similar to perfect competition in that firms in both market structures:

Do not face any barriers to entry into the indistry in the long run

In a perfectly competitive industry, the market demand curve is usually

Downward-sloping

In monopolistic competition, each firm:

Has some ability to set the price of its differentiated good

One characteristic of a perfectly competitive market is that there are _______ sellers of the good or service

Hundreds of thousands of

(Figure) Jake and Zoe are the only producers of slushies in Vacatown. Each week, each firm decides whether to price high or price low for the following week. The figure shows the profit per week earned by the two firms. What is the Nash equilibrium for Jake and Zoe?

Jake prices low; zoe prices low

(Figure) Jake and Zoe are the only producers of slushies in Vacatown. Each week, each firm decides whether to price high or price low for the following week. The figure shows the profit per week earned by the two firms. Suppose the firms each decide to price high initially, and adopt a tit-for-tat strategy for the following weeks. After a few weeks, how much profit would each firm make per week?

Jakes profit= $1,000; zoe's profit= $1,000

Due to the existence of a large number of similar, but not identical, substitutes in most communities, the market for financial planners is best considered

Monopolistic competetion

The market for dentist in most communities can be considered ______ because there are a large number of similar, but not identical, substitutes in the market

Monopolistic competition

Individuals in a market who must take the market price as given are:

Price-takers

(Figure) the Figure shows the payoff matrix for two producers, Gehrig and Gabriel, who sell handmade Davy Crockett figurines in San Antonio. Both Gehrig and Gabriel have two strategies available to them: to produce 5,000 figurines each month or to produce 7,000 figurines each month. For Gehrig and Gabriel, the dominant strategy is to:

Produce 7,000 figurines

A monopoly is likely to _______ and ________ then a perfectly competitive firm

Produce less; charge more

Market structures are categorized by the following two criteria:

The number of firms and whether or not products are differentiated

All except one of the following are characteristics of perfect competition. Which is the exception?

There are many producers; one firm has a 25% market share, and all the remaining firms have a market share of less than 2% each.

(Figure) the Figure shows the payoff matrix for two producers, Gehrig and Gabriel, who sell handmade Davy Crockett figurines in San Antonio. Both Gehrig and Gabriel have two strategies available to them: to produce 5,000 figurines each month or to produce 7,000 figurines each month. If both follow a tit-for-tat strategy, equilibrium will be reached when:

They each produce 5,000 figurines

(Figure) the Figure shows the payoff matrix for two producers, Gehrig and Gabriel, who sell handmade Davy Crockett figurines in San Antonio. Both Gehrig and Gabriel have two strategies available to them: to produce 5,000 figurines each month or to produce 7,000 figurines each month. If each wishes to maximize profits, the combined profits of the two are maximized if:

They each produce 5,000 figurines

An oligopoly knows that its ________ affect its ________ and that the ________ of its rivals will affect it.

actions; rivals; reactions

An industry with a large number of relatively small firms producing _______ in a market with easy entry and exit is a(n) _________

differentiated products; monopolistic competition

Which of the following industries is most likely to be monopolistically competitive?

fresh bagel shops

Oligopoly is a market structure that is characterized by a:

small number of interdependent firms producing identical or differentiated products.

Oligopoly is a market structure that is characterized by a _________ number of _________ firms that produce _______ products

small; interdependent; identical or differentiated