AU ECON 2020 Chapter 16

Graphic

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Monopolistically competitive firm, in response to the situation represented by the figure

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Which of the following will occur in the long run in this industry?

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How much consumer surplus will be derives from the purchase of this product at the monopolistically competitive price?

$200

Which of the following conditions is characteristic of a monopolistically competitive firm in the long-run equilibrium

Average Total Cost is equal to demand, and Marginal Revenue is equal to Marginal Cost

In the long run,

Both monopolistically competitive and perfectly competitive firms produce where P=ATC.

A monopolistically competitive market is characterized by

Differentiated products, but not long run profits

Monopolistic competition differs from perfect competition because in monopolistically competitive markets

Each of the sellers offers a somewhat different product

In a monopolistically competitive market

Firms can enter or exit the market without restrictions

In both perfect competition and monopolistic competition, each firm,

Has many competitors

The profit maximizing rule for a firm in a monopolistically competitive market is to always select the quantity at which

Marginal revenue is equal to Marginal Cost

Which of the following statements is correct?

Monopolistic competition is similar to monopoly because both market structures are characterized by firms being price makers rather than price takers.

In which of the following market structures can a firm earn an economic profit in the short run?

Perfect Competition, Monopolistic Competition, and Monopoly (All of these market structures can earn an economic profit in the short run.)

Which of the following conditions is characteristic of a monopolistically competitive firm in short-run equilibrium?

Price is greater than Marginal Cost

A similarity between monopoly and monopolistic competition is that in both market structures

Sellers are price makers rather than price takers

Which of the following best describes the idea of excess capacity in monopolistic competition?

The output produced by a typical firm is less than what would occur at the minimum point on its ATC curve

In perfect competition as well as in the monopolistic competition

There are many firms in a single market.

Which of these types of firms can earn a positive economic profit in the long run?

monopolies, but not competitive firms or monopolistically competitive firms