11

Monopolistic competition is characterized by which of the following attributes? (i) free entry (ii) product differentiation (iii) many sellers

(i), (ii), and (iii)

product differentiation causes the seller of a good to face what type of demand curve?

downward sloping

At the profit-maximizing, or profit-minimizing, output level, the firm in this figure has total costs of approximately

$21,000

At the profit-maximizing, or profit-minimizing, output level, the firm in this figure has total revenue of approximately

$24,000

The maximum total short-run economic profit for the monopolistically competitive firm in this figure is

$3,000

What price will they charge in this market?

$800

How many u it's if output will the firm produce in this figure?

30

Excess capacity is

An example of the inefficiencies of monopolistically competitive markets

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

Firms will enter this industry

The firm in this figure is monopolistically competitive. This firm

Is earninga short-run economic profit

A profit-maximizing firm in a monopolistically competitive market is characterized by which of the following?

Marginal revenue equals marginal cost

Which of the following statements is true?

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

Which of the following statements is not correct?

Monopolistic competition is similar to oligopoly because both market structures are characterized by barriers to entry

The general term for market structures that fall somewhere between monopoly and perfect competition is

Monopolistically compeitive

An important difference between the situation faced by a profit-maximizing monopolistically competitive firm in the short run and the situation faced by that same firm in the long run is that in the short run,

Price may exceed average total cost, but in the long run price equals average total cost

Assume the firm in the figure is currently producing 20 units of output and charging $925. The firm

Will increase its profits if it lowers its price and expands its production level