Which industry would be best characterized as monopolistically competitive?-smart-phone manufacturing-Internet-search sites-web design consulting-business cloud-computing services
Under monopolistic competition, entry to the industry is-completely free of barriers.-more difficult than under pure competition but not nearly as difficult as under pure monopoly.-more difficult than under pure monopoly.-blocked.
A monopolistically competitive firm”s marginal revenue curve-is downsloping and coincides with the demand curve.-coincides with the demand curve and is parallel to the horizontal axis.-is downsloping and lies below the demand curve.-does not exist because the firm is a “price maker.”
Monopolistic competition is characterized by excess capacity because-firms are always profitable in the long run.-firms charge a price that is greater than marginal cost.-firms produce at an output level less than the least-cost output.-the demand for a product is perfectly elastic in this type of industry.
In the long run, the representative firm in monopolistic competition tends to have-excess capacity.-economic profits-no product differentiation.-a perfectly elastic demand curve.
At long-run equilibrium in monopolistic competition, there is-allocative efficiency.-productive efficiency.-both allocative and productive efficiency.-neither allocative nor productive efficiency.
Which statement concerning monopolistic competition is false?-In the long run P = AC > MC.-Firms may experience losses in the short run.-Firms differentiate their products, but the products are relatively substitutable.-Firms may experience positive economic profits in the long run.
In long-run equilibrium, a profit-maximizing firm in a monopolistically competitive industry will produce the quantity of output where-ATC = P, MR = MC = P.-ATC -ATC -ATC = P, MR = MC
Mutual interdependence means that a firm”s-behavior is affected by other firms” actions.-profits are affected by other firms” entry or exit.-costs are affected by other firms” costs.-revenues are affected by other firms” demand for its product.
If oligopolistic firms facing similar cost and demand conditions successfully collude, price and output results in this industry will be most accurately predicted by which of the following models?-the kinked demand curve model of oligopoly-the price-leadership model of oligopoly-the pure monopoly model-the monopolistic competition model
A major reason that firms form a cartel is to-reduce the elasticity of demand for the product.-enlarge the market share for each producer.-minimize the costs of production.-maximize joint profits.
Informal collusion to restrict output and increase prices is sometimes referred to as a-merger.-cartel.-tacit understanding.-kinked-demand oligopoly.