Question: All but which one of the following are true of monopolistic competition?
MR = MC
P>MC
AR = MR
The demand curve the firm faces slopes downward.
Entry is easy.
Question: At the point of long-run equilibrium for a perfectly competitive firm,
economic profits are zero.
TR > TC.
TR < TC.
P = AVC.
normal profits are zero.
Question: The greater the price elasticity of the demand curve that the firm faces in monopolistic competition, the higher the degree of competition in the industry.
The lower the degree of competition in the industry.
The fewer substitutes for the good produced.
The easier it is for the firm to raise its price.
The less sales the firm will gain from a price decrease.
Question: Retail outlets operate in which of the following market structures?
monopolistic competition
oligopoly
monopoly
oligopsony
Question: Which one of the following is NOT a basic assumption of the model of perfect competition?
Many sellers
A differentiated product
Full information
Mobile resources
Question: A firm in a(n) industry will have the most elastic demand curve.
Student Answer: monopolistic
oligopolistic
monopolistically competitive
perfectly competitive
Question: The marginal cost curve above the minimum average variable cost
Indicates points where the firm will realize an economic profit.
covers the area where a firm should shut down.
is equal to the firm's marginal revenue curve.
is the firm's short-run supply curve.
Question: A firm in a monopolistically competitive industry faces a downward-sloping demand curve because
the product is homogeneous.
the product is differentiated.
nonprice competition is missing.
barriers to entry are high.
Question: Along a downward-sloping monopoly demand curve,
marginal revenue is greater than price.
elasticity of demand is constant.
marginal revenue decreases when price decreases.
marginal revenue is equal to zero when price is equal to zero.
Question: Perfect competition is not an abstraction from reality; it is reality.
an "ideal type"-that is, a model or guidepost for comparison.
the only market structure in the United States.
the best of all possible worlds.
found in the U.S. steel industry.