ECON 201 Chapters 13-15
Monopolistic competition resembles pure competition because
barriers to entry are either weak or nonexistent
The kinked-demand curve of an oligopolist is based on the assumption that
competitors will follow a price cut but ignore a price increase
If profits are negative in a monopolistically competitive market, then:
firms will exit the market until economic profit returns to zero.
Under monopolistic competition, entry to the industry is
more difficult than under pure competition but not nearly as difficult as under pure monopoly.
The automobile, household appliance, and automobile tire industries are all illustrations of
differentiated oligopoly
In which of these continuums of degrees of competition (lowest to highest) is oligopoly properly placed?
Pure monopoly, oligopoly, monopolistic competition, pure competition
Which of the following is the best example of oligopoly?
automobile manufacturing
Monopolistic competition means:
many firms producing differentiated products.
Which term would be most closely associated with the "new and better goods and services and new and better ways of producing and distributing them?"
Technological Advance
The first commercial introduction of transparent tape is an example of
innovation
U.S. firms collectively devote the largest portion of their total R&D spending to
innovation and diffusion
The first working prototype of a microcomputer chip would be an example of
invention
Technological advance is a three-step process involving
invention, innovation, and diffusion
A Game theory
is the analysis of how people (or firms) behave in strategic situations
The very long run would be a period in which
technology changes and the firms can introduce new products
Use your basic knowledge and your understanding of market structures to answer this question. Which of the following companies most closely approximates a differentiated oligopolist in a highly concentrated industry?
Ford Motor Company
Broadly defined, technological advance
comprises new and improved goods and services and/or new and improved ways of producing or distributing them
A monopolistically competitive firm in the short run is producing where price is $3.00 and marginal cost is $1.50. To maximize profits:
it is unclear what the firm should do without knowing marginal revenue.
In a duopoly, if one firm increases its price, then the other firm can
keep its price constant and thus increase its market share
Monopolistic competition is characterized by a
large number of firms and low entry barriers.
The wide imitation and spread of an innovation is called
diffusion
In an oligopolistic market
products may be standardized or differentiated
The Herfindahl index is:
the sum of the squared percentage market shares of all firms in the industry.
In economists' models, technological advance occurs in
the very long run
In a monopolistically competitive market:
there is a relatively large number of sellers.
Suppose that Marlen Fisher has legal protection against anyone producing and selling a fishing lure specifically named "MarFish." This legal protection is most likely to be a
trademark
In which of these continuums of degrees of competition (highest to lowest) is monopolistic competition properly placed?
Pure competition, monopolistic competition, oligopoly, pure monopoly
Oligopolistic industries are characterized by
a few dominant firms and substantial entry barriers
The term oligopoly indicates
a few firms producing either a differentiated or a homogeneous product
Nonprice competition refers to:
advertising, product promotion, and changes in the real or perceived characteristics of a product.
