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Exam 11: Imperfect Competition

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Question 31

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Below are data for a monopolistically competitive firm. -Refer to the information above to answer this question.What is true if the firm is producing at the profit-maximizing output?

A) It is producing at economic capacity
B) It is achieving allocative efficiency.
C) It is achieving both economic and allocative efficiency
D) It is experiencing excess capacity

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Question 32

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The franchise system attempts to limit the entry of new firms into an existing industry.

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Question 33

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-Refer to the graph above to answer this question.Which one of the following statements is correct in the long run?

Explain why there is excess capacity in a monopolistically competitive market structure in the long-run?

The following graph shows the costs and revenues of a typical firm operating in a monopolistically competitive industry. -Refer to the graph above to answer this question.Which of the following statements is correct?

What are some of the arguments for and against advertising?

"Since monopolistically competitive firms do not earn economic profits in the long-run,they are both allocatively and productively efficient." Evaluate this statement.

From 1990 to 2005,what manufacturing industry has become four times as concentrated?

Imperfect competition is characterized by firms competing on price.

What are the main features of an oligopoly?

In what way does the theory of the kinked-demand curve explain price stability in an oligopoly industry?

The following information is for a monopolistically competitive firm operating in the long-run.When: MC = MR,Q = 60 MC = P,Q = 85 AC = MC,Q = 90 a)What output is economic capacity? b)What is the amount of the firm's excess capacity?

-Refer to Figure 11.10 to answer this question.What price will the firm charge?

Draw a linear demand curve,marginal revenue curve,marginal cost curve,average total cost curve,and an average variable cost curve for a monopolistic competitor making an economic loss in the short run.

The assumption that firms attempt to maximize sales revenue underlies much of the analysis in microeconomics.

A monopolistic competitive firm is producing 30 units when MR = MC = $30.At that level of output,the price is $60,average total cost is $75,and average variable cost is $65.How much economic profit is the monopolistic competitive firm making? Should the firm continue to operate?

All of the following,except one,are examples of product differentiation.Which is the exception?

Demonstrate graphically and explain verbally the case of a monopolistically competitive firm earning a positive economic profit.Is this firm in a short run or a long-run equilibrium? How does this case differ from the monopoly market outcome?

Draw a linear demand curve,marginal revenue curve,marginal cost curve,and an average total cost curve for a monopolistically competitive firm in the long-run.Clearly identify the excess capacity that occurs with monopolistic competition.

What is true about both perfectly competitive and monopolistically competitive firms in long-run equilibrium?