ls monopolist competition

What is one way that monopolistic competition is similar to a monopoly?

both have some control over prices

Referring to the graph, the profit or loss amount for Sandra's Sweets at the profit maximizing output and price is $_________

-1280

Which of the following markets could be considered monopolistically competitive? (Choose all that apply.)

-Hotels -clothing -fast food

Referring to the graph, what is the profit maximizing price?

140

Suppose Carl's Candies sells 100 boxes of candy for $4 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's makes a total profit of:

150

Suppose Carl'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's makes a profit per unit of:

2.50

Suppose Carl'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's makes a total profit of:

250

Using the table, which shows a monopolistically competitive firm's demand schedule, marginal revenue, and marginal cost to answer the following question. The profit maximizing price for this firm is $_________

7

In order for a monopolistically competitive firm to produce at a point that is both productively and allocatively efficient, which of the following has to be true about the profit-maximizing quantity?

Demand = Marginal Cost = ATC

What would happen to a firm's demand in a monopolistically competitive market if there was less competition in the market?

Demand would become more inelastic

What would happen to a firm's demand in a monopolistically competitive market if there was an increase in the number of consumers?

Demand would increase.

What do profits and losses in a monopolistically competitive markets lead to in the long run?

Entry into and exit from the market.

In a monopolistically competitive market, which of the following represents a long-run adjustment?

Firms enter the market due to economic profits.

What is true about firms in monopolistic competition in the short-run?

Monopolistically competitive firms can generate an economic profit, a normal profit, or an economic loss.

Use the graph of a monopolistically competitive firm above to answer the following question. What is the amount of profit or less Monica will make at the profit maximizing price and quantity?

Profit of $2000

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

The products are standardized.

n monopolistic competition, once you find the profit-maximizing quantity, how do you find the profit-maximizing price?

You read the corresponding price from the demand curve.

Which of the following characteristics of monopolistic competition helps to best explain why consumers can usually find exactly what they are looking for based on their preferences and budgets?

a differentiated product

Monopolistic competition is a market 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.

When the marginal benefit of the last unit equals the marginal cost of the last unit, production is _____________ efficient.

allocative

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

allocative efficiency.

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

barriers to entry.

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

brand

The underutilization of resources that occurs when the quantity of output a firm chooses to produce is less than the quantity that minimizes the average total cost is called excess ________.

capacity

Monopolistically competitive markets:

combine characteristics of competitive markets and pure monopolies.

The value of the economic surplus that is forgone when a market is not allowed to adjust to its competitive equilibrium is the _________ loss.

deadweight

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:

deadweight loss

Because the products of monopolistically competitive firms are _________ from other companies in their industry, the demand they face is ____________ sloping

differentiated, negative

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.

differentiated, price

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

differentiation

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

easy

Zero ___________ profit is when the firm's revenue equals its operating costs without a loss.

economic

When monopolistically competitive firms follow the marginal revenue and the marginal cost rule, the result can be ____________ profits, __________ profits, or even losses, depending on market conditions.

economic, normal

The demand for a monopolistically competitive firm is more ________ than the demand faced by a pure monopoly because of the availability of close substitutes.

elastic

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

entry, exit

The underutilization of resources that occurs when the quantity of output a firm chooses to produce is less than the quantity that minimizes the average total cost is called ___________ capacity

excess

The mutual interdependence observed among oligopolistic firms is often studied using the tools of ___________ theory.

game

Compared to perfect competition, a benefit of monopolistic competition for consumers is:

increased product variety.

through advertising and branding, monopolistically competitive firms increase the demand for their products and make those demands relatively more __________ allowing them to charge higher ___________ and generate ____________ economic profits.

inelastic, prices, high

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.

leave, increasing

Because monopolistically competitive firms face a downward-sloping demand curve, their ____________ revenue curve lies below the __________ curve.

marginal, demand

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

maximization

Monopolistically competitive firms are unable to produce enough output to reach the _____________ average total cost because of the presence of other monopolistically competitive firms in the industry.

minimum

The presence of many monopolistically competitive firms in an industry makes the firm unable to produce enough output to reach the _________ average total cost, so the firms have ________ capacity to produce

minimum, excess

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 ____________ competition

monopolistic

In a(n) ____________ competitive market, consumers can usually find exactly what they are looking for based on their preferences and budgets.

monopolistic

One way in which monopolistic competition and monopoly differ is that:

monopolistic competition has many sellers, and monopoly has one seller.

______________ competitive firms have an incentive to continuously improve and differentiate their products to have more control over their prices and, they hope, to earn more ___________ profit

monopolistic, economic

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

normal

Producers operating in oligopolistic markets generate:

normal profits and even losses in the short run.

Referring to the graph, Sandra's Sweets is a monopolistically competitive firm that produces 120 cakes. This level of production is:

not productively or allocatively efficient.

Monopolistic competition and a monopoly are:

not the same market structure

The behavior followed by ______ firms needs to be strategic, given that they face other competitors in their markets.

oligopolistic

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

product

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

productive

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

productive efficiency.

Producers operating in oligopolistic markets can generate normal _______ and even _________ in the short run.

profit, losses

A monopolistically competitive firm should produce output until the marginal ___________ equals the marginal _________.

revenue, cost

Given that oligopolistic firms face other competitors in their markets, their behavior must definitely be:

strategic

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 ___________

variation

Which of the following markets would most closely resemble monopolistic competition?

wine