1153 1154 1155 1157 Which of the following industries is most likely to be monopolistically competitive automobile production Incorrect fresh bagel shops True Answer Correct corn farming Incorrect electric utility production Incorrect A monopolistically competitive industry such as corn snack chips and a perfectly competitive industry like wheat farming are alike in that firms in both types of industries produce identical products Incorrect firms in both types of industries produce similar but not identical products Incorrect barriers to entry in both industries are large Incorrect there are many firms in each industry True Answer Correct In monopolistic competition there is free entry and exit in the long run True Answer Correct each firm produces a standardized product Incorrect there are few producers Incorrect there are barriers to entry Incorrect 1156 In monopolistic competition each firm is a price taker Incorrect has some ability to set the price of its differentiated good True Answer Correct will set price equal to marginal cost Incorrect has marginal revenue that is greater than price Incorrect The wedding dress industry is monopolistically competitive As a result which of the following conditions applies to this industry There are thousands of dress suppliers all selling identical products Incorrect 1159 In monopolistic competition 1158 1160 1161 Dresses tend to be differentiated among the many sellers serving this market True Answer Correct There is freedom of entry but not exit in this industry Incorrect Prices tend to be lower than if the dress industry approximated perfect competition Incorrect Monopolistic competition is similar to perfect competition because firms in both market structures are price takers Incorrect produce goods that are perfect substitutes Incorrect find it beneficial to advertise Incorrect do not face any barriers to entry into the industry in the long run True Answer Correct firms earn zero economic profits in the long run True Answer Correct each firm produces a product identical to that of every other firm in the industry Incorrect firms are aware of their strategic interdependence Incorrect firms earn large economic profits in the long run Incorrect For the monopolistically competitive wild caught seafood market the demand curve for any individual firm is and there are producers of seafood downward sloping few Incorrect upward sloping many Incorrect vertical few Incorrect downward sloping many True Answer Correct The downward sloping demand curve for a monopolistically competitive firm reflects product differentiation True Answer Correct eventually will become perfectly elastic as more firms enter Incorrect indicates collusion among firms in the industry Incorrect ensures that the firm will produce at minimum average cost in the long run Incorrect 1162 1163 1164 1165 1166 An industry characterized by many firms producing similar but differentiated products in a market with easy entry and exit is called perfect competition Incorrect monopoly Incorrect monopolistic competition True Answer Correct oligopoly Incorrect An example of monopolistic competition is the market restaurant True Answer Correct soft drink Incorrect automobile Incorrect airline Incorrect A n is a single firm with whereas a n implies an industry with firm s where there is are oligopoly no barriers to entry monopoly many easy entry and exit Incorrect monopoly barriers to entry monopolistic competition many easy entry and exit True Answer Correct monopoly barriers to entry oligopoly few no barriers to entry Incorrect monopolistic competitor barriers to entry monopoly one barriers to entry Incorrect In large shopping malls the retail market is most illustrative of monopolistic competition True Answer Correct monopoly Incorrect perfect competition Incorrect perfect oligopoly Incorrect An industry with a large number of relatively small firms producing differentiated products in a market with easy entry and exit of firms is a monopoly Incorrect a duopoly Incorrect an oligopoly Incorrect monopolistically competitive True Answer Correct 1167 A monopolistically competitive industry is characterized by a small number of firms producing identical products with barriers to entry for firms Incorrect small number of firms producing similar products with relatively easy entry for firms Incorrect large number of firms producing similar products with relatively easy entry for firms True Answer Correct large number of firms producing identical products with relatively easy entry for firms Incorrect Monopolistic competition is an industry structure characterized by a product with no close substitutes Incorrect a horizontal demand curve Incorrect a large number of firms True Answer Correct barriers to entry and exit Incorrect Because of the existence of a large number of similar but not identical substitutes in most communities the market for chiropractors is best considered to be an oligopoly Incorrect a perfect competition Incorrect monopolistically competitive True Answer Correct a monopoly Incorrect Because of the existence of a large number of similar but not identical substitutes in most communities the market for financial planners is best considered to be a monopoly Incorrect an oligopoly Incorrect a perfect competition Incorrect monopolistically competitive True Answer Correct A feature of monopolistic competition that makes it different from monopoly is the fact that firms in monopolistically competitive industries follow the marginal decision rule while monopolies do not Incorrect downward sloping demand curve Incorrect 1168 1169 1170 1171 1172 1173 1174 1175 1176 downward sloping marginal revenue curve Incorrect number of firms in the industry True Answer Correct A market structure characterized by many competitors each producing identical products with free entry and exit into the industry is described as a n monopolistically competitive industry Incorrect oligopoly Incorrect perfectly competitive industry True Answer Correct monopoly Incorrect Which of the following is not a characteristic of monopolistic competition product differentiation Incorrect lack of barriers to entry and exit in the long run Incorrect many competing producers Incorrect tacit collusion True Answer Correct Which of the following describes a feature shared by both monopolistic competition and perfect competition few firms competing in the industry Incorrect no barriers to entry or exit in the long run
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