module 10 learnsmart ECO2023

monopolistic competition and a monopoly are

not the same market structure

the graph shows the marginal cost and the average total cost curves for a typical firm competing in the monopolistically competitive market for frozen foods the long run equilibrium would occur at an output level of _ thousand cases, and the price would be _

4 6.5

the graph shows the marginal cost and the average total cost curves for a typical firm competing in the monopolistically competitive market for frozen foods to maximize profits, the firm should produce _ thousand cases of frozen food to maximize profits, this firm should charge _

5 9

for monopolistically competitive firms, _ their products is important because many consumers do not like taking risks, and this way they can learn about products before buying them

branding

monopolistically competitive markets

combine characteristics of competitive markets and pure monopolies

a number of entry barriers are present in oligopolistic markets, including

control of the resources needed to produce output economies of scale that may allow only a small number of firms to operate in a market pricing strategies patents significant costs of capital

determine how each of the events listed below would affect the demand curve for food at Steve's Shrimp Shack, a seafood restaurant operating in a monopolistically competitive restaurant market. The demand could increase (rightward short) or decrease (leftward shift), and it also could become more or less elastic the number of other restaurant in the area increases Steve institutes a frequent-diner program whereby a customer who visits five times receives a sixth meal free the number of consumers in the area increases

decreases; more elastic increases; less elastic increases; no impact

because the products of monopolistically competitive firms are _ from other companies in their industry, they face a _ sloping demand curve

differentiated downward

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

exit increasing

total revenue minus the _ and _ costs of production is economic profit

implicit explicit

the level of profit that occurs when the total revenue is less than the total cost is known as a _

loss

Allocative efficiency occurs when

marginal benefit = marginal cost

in a _ competitive market, consumers can usually find exactly what they are looking for based on their preferences and budgets

monopolistic

producers operating in oligopolistic markets generate

normal profits and even losses in the short run

for each of the markets listed below, determine whether the market can reasonably be described as monopolistically competitive or not satellite radio AM or FM radio common salt clothing shampoo

not monopolistically competitive not monopolistically competitive monopolistically competitive

the behavior followed by _ firms needs to be strategic, given that they face other competitors in the market

oligopolistic

when there is productive efficiency:

output is produced using the fewest resources possible to produce a good or a service output is produced at the lowest possible total cost per unit of production

a monopolistically competitive firm should produce output until the marginal _ equals the marginal _

revenue cost

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 _

variety

laws designed to prevent firms from engaging in behaviors that would lessen competitive in a market are called

antitrust laws

to calculate profit, which three pieces of information must be identified?

average total cost quantity of output price

the strategy of distinguishing one firms product from the competing products of other firms is called product _

differentiation

which of the following are the four characteristics of a perfectly competitive market?

easy entry and exit standardized product producers who are price takers large number of buyers and sellers

monopolistic competition and perfect competition have one main characteristic in common: relatively easy market _ and _

entry exit

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

monopolistic competition

because _ competitive firms have some control over prices, the firms will charge consumers the price they are willing and able to pay for the available output, which is found by projecting the profit-maximizing output level onto the _ curve

monopolistically demand

_ competitive firms have an incentive to continuously improve and differentiate their products to have more control over their prices and to earn more _ profit

monopolistically economic

_ interdependence is a situation in which the strategy followed by one producer will likely affect the profits and behavior of another producer

mutual

monopolistically competitive firms are unable to produce enough output to reach the minimum average total cost because of the:

presence of other monopolistically competitive firms in the industry

in an oligopoly

producers may or may not earn economic profits

consider the monopolistically competitive firm represented in the graph. The firm begins in long run equilibrium, generating a normal profit. suppose there is a large increase in demand in the overall market, resulting in an increase in demand for this firm's product. The demand and the marginal revenue curves will once the demand for this firms product increases, the new profit maximizing level of output and price for the firm with an increase in demand, the firm will generate an economic in the long run, other firms will _ this market

shift to the right will be higher than the original profit enter

in monopolistically competitive markets, which of the following allow consumers to be more responsive to price changes

the availability of close substitutes