Lesson 10 Quiz

A

Monopolistic competition is characterized by which of the following attributes? (i) free entry (ii) product differentiation (iii) many sellers A. (i), (ii), and (iii) B. (i) and (ii) only C. (i) and (iii) only D. (ii) and (iii) only

C

Product differentiation in monopolistically competitive markets ensures that, for profit-maximizing firms, A. marginal revenue will equal average total cost. B. marginal cost will exceed average revenue. C. price will exceed marginal cost. D. average variable cost will be declining.

D

Each firm in a monopolistically competitive industry faces a downward-sloping demand curve because A. there are very few other sellers in the market. B. there are many other sellers in the market. C. the firm faces the threat of entry into the market by new firms. D. the firm's product is different from those offered by other firms in the market.

B

Refer to figure 1: Which of the following sets of explanations best describes the differences between the graphs above? A. Panel A: monopolistically competitive firm's demand curve Panel B: monopoly firm's demand curve Panel C: perfectly competitive firm's demand curve Panel D: supply curve B. Panel A: perfectly competitive firm's demand curve Panel B: monopolistically competitive firm's demand curve Panel C: monopoly firm's demand curve Panel D: supply curve C. Panel A: oligopoly firm's demand curve Panel B: perfectly competitive firm's demand curve Panel C: monopolistically competitive firm's demand curve Panel D: supply curve D. Panel A: monopolistically competitive firm's demand curve Panel B: monopoly firm's demand curve Panel C: oligopoly firm's demand curve Panel D: perfectly competitive firm's demand curve

A

Refer to figure 1: Which of the graphs illustrates the demand curve most likely faced by a firm in a monopolistically competitive market? A. Panel B B. Panel A C. Panel D D. Panel C

C

Refer to table 1: What is the concentration ratio in Industry A? A. 71% B. 38% C. 92% D. 98%

B

Refer to table 1: What is the concentration ratio in Industry D? A. 72% B. 58% C. 23% D. 39%

B

Refer to table 2: What price should this firm charge to maximize profit? A. $24 B. $18 C. $6 D. $12

B

Refer to table 3: What price will this firm charge to maximize profit? A. $40 B. $30 C. $25 D. $35

A

To maximize its profit, a monopolistically competitive firm chooses its level of output by looking for the level of output at which A. marginal revenue equals marginal cost. B. price equals marginal cost. C. average total cost is minimized. D. All of the above are correct.

C

Which of the following conditions is characteristic of a monopolistically competitive firm in short-run equilibrium? A. All of the above are correct. B. P > AR C. P > MC D. MR > MC

B

Which of the following conditions is characteristic of a monopolistically competitive firm in short-run equilibrium? A. P > ATC B. Any of the above could be correct. C. P < ATC D. P = ATC

D

Which of the following is a characteristic of monopolistic competition? A. identical product B. patents C. ownership of a key resource by a single firm D. free entry

C

profit-maximizing firm in a monopolistically competitive market is characterized by which of the following? A. revenue is always maximized along with profit B. average revenue is equal to marginal revenue C. average revenue exceeds marginal revenue D. marginal revenue exceeds average revenue