Chapter 11 Quiz
Which of the following is NOT a characteristic of a monopolistically competitive market? A. There are no artificial barriers to entry. B. There are many firms selling products that are similar but not identical. C. There are many firms that have some control over price. D. There is only one firm selling a product.
There is only one firm selling a product.
Which of the following is a characteristic of a monopolistically competitive market? I. There are many sellers. II. Firms sell slightly differentiated products. III. Each firm faces a downwardminus sloping demand curve. A. I only B. I and II only C. II and III only D. I, II, and III
I, II, and III
correct, Concept Question 1.1 The demand for a product in a monopolistically competitive market tends to be A. inelastic, because of the availability of many close substitutes. B. inelastic, because there are few close substitutes. C. elastic, because there are few close substitutes. D. elastic, because of the availability of many close substitutes.
elastic, because of the availability of many close substitutes.
The Motor Carrier Act of 1980 resulted in: A. lower value of a trucking license. B. more firms entering the trucking industry. C. lower freight prices. D. All of the above are correct.
All of the above are correct.
Suppose that a monopolistically competitive market is in its longminus run equilibrium. If the market demand curve shifts to the right due to changes in consumer preferences, A. the number of firms in the market will increase in the shortminus run. B. firms' average costs of production will increase as they increase output levels in the shortminus run. C. firms will earn positive economic profits in the shortminus run. Your answer is correct. D. none of the above
firms will earn positive economic profits in the shortminus run.
The "good news" for consumers from monopolistic competition is ________ but the "bad news" for producers is that ________. A. lower prices than monopoly; there are higher travel costs B. lower prices than monopoly; there are higher production costs Your answer is correct. C. lower prices than monopoly; there is less product variety D. greater product variety; product prices are higher
lower prices than monopoly; there are higher production costs
In Eugene, Oregon, there are several Italian restaurants, each offering slightly different items prepared in slightly different ways. It is likely that an Italian restaurant in Eugene, Oregon, operates in a: A. perfectly competitive market. B. oligopoly market. C. monopoly market. D. monopolistically competitive market.
monopolistically competitive market.
When the government eliminates artificial barriers to entry: A. competition in the market will decrease. B. prices to consumers will likely increase. C. more firms will enter the market. Your answer is correct. D. All of the above will occur.
more firms will enter the market.
Which of the following characteristics of the monopolistically competitive and the perfectly competitive market will cause the firm to earn zero profits in the long run? A. many buyers. B. homogeneous product C. no barriers to entry Your answer is correct. D. price taker
no barriers to entry
When a second firm enters a monopolist's market: A. market price will rise. B. the quantity produced by the first firm will increase. C. the first firm's profits will decrease. Your answer is correct. D. All of the above will occur.
the first firm's profits will decrease.
