G

What does monopolistic competition have in common with perfect competition

A large number of firms and freedom of entry and exit

The cotton tee shirt industry is monopolistically competitive because each firm has

A very small market share

In the long run in monopolistic competition firms

Can earn zero economic profit but not an economic profit

In monopolistic competition, there are NO barriers to entry and so firms in monopolistic competition CANNOT earn an economic profit in the long run

In monopolistic competition, there are NO barriers to entry and so firms in monopolistic competition CANNOT earn an economic profit in the long run

If a monopolistically competitive sellers marginal cost is $3.56 the firm will not change its output if

It's marginal revenue is equal to 3.56

Excess capacity exists when a firm produces

Less than the quantity that minimizes average total cost

The marginal revenue facing a monopolistically competitive firm

Lies below its demand curve

One characteristic of monopolistic competition is that it has

Many firms producing a slightly differentiated product

Which of the following characterizes a firm in monopolistic competition in the

Markups of price over marginal cost and zero economic profit

A firm in monopolistic competition

Might be selling a brand name product

A firm's markup is

The difference between price and marginal cost

The food industry is characterized as monopolistic competition and the cereal industry is characterized as oligopoly

The food industry is characterized as monopolistic competition and the cereal industry is characterized as oligopoly

An example of a firm in monopolistic competition is

The many Chinese restaurants in San Francisco

Firms in monopolistic competition determining profit-maximizing by producing

Where marginal revenue equals marginal cost

A market is considered competitive if the Herfindahl Hirschman Index is LOW and its four-firm concentration ratio is LOW,

low, low

In which of the following ways do advertising and other selling costs affect a firm's cost curve

1 2 & 3

What does monopolistic competition have in common with Monopoly

A downward-sloping demand curve

If advertising increases the number of firms in an industry, each firm's demand

Decreases

In monopolistic competition the presence of a large number of firms making a differentiated product means that

Each firm can set the price of its particular product

Firms in monopolistic competition

Face a downward-sloping demand curve

If a firm in monopolistic competition is earning an economic profit

Other firms can enter the market

A firm in monopolistic competition makes its decisions on quantity and price by

Producing where MC=MR and setting the price for this quantity from the demand curve

To maintain their economic profits firms in monopolistic competition must continually engage in

Product innovation and development

Which of the following is the best example of a differentiated product

Running shoes

Monopolistic competition is judged to be economically inefficient because

The price is greater than marginal cost

In monopolistic competition, each firm supplies a small part of the market. This occurs because

There are a large number of firms

The Herfindahl Hirschman Index measures Market concentration in an industry by summing the square of the percentage market shares for

the 50 LARGEST FIRMS