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Figure 16-14 Figure 16-14 -Refer to Figure 16-14. The difference between the price charged by the monopolistically competitive firm and the price that would be charged if this firm operated in a perfectly competitive market is represented by which line segment? -Refer to Figure 16-14. The difference between the price charged by the monopolistically competitive firm and the price that would be charged if this firm operated in a perfectly competitive market is represented by which line segment?

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Which of the following market structures results in a deadweight loss in the long run? ​


A) ​Perfect competition and monopolistic competition
B) Monopolistic competition and monopoly
C) ​Perfect competition and monopoly
D) ​All of these market structures lead to a deadweight loss in the long run

E) C) and D)
F) B) and C)

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Table 16-1 The following table shows the percentage of output supplied by the top eight firms in four different industries. Table 16-1 The following table shows the percentage of output supplied by the top eight firms in four different industries. -Refer to Table 16-1. Which industry has the lowest concentration ratio? A) Industry A B) Industry B C) Industry C D) Industry D -Refer to Table 16-1. Which industry has the lowest concentration ratio?


A) Industry A
B) Industry B
C) Industry C
D) Industry D

E) A) and B)
F) A) and C)

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Advertisements that appear to convey no information at all


A) are usually associated with "infomercials."
B) are useless to consumers but valuable to firms.
C) are useless to firms but valuable to consumers for their entertainment quality alone.
D) may convey information to consumers by providing them with a signal that firms are willing to spend significant amounts of money to advertise.

E) B) and D)
F) All of the above

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Scenario 16-3 Peter operates an ice cream shop in the center of Fairfield. He sells several unusual flavors of organic, homemade ice cream so he has a monopoly over his own ice cream, though he competes with many other firms selling ice cream in Fairfield for the same customers. Peter's demand and cost values for sales per day are given in the table below. (Everyone who purchases Peter's ice cream buys a double scoop cone because it's so delicious.) Scenario 16-3 Peter operates an ice cream shop in the center of Fairfield. He sells several unusual flavors of organic, homemade ice cream so he has a monopoly over his own ice cream, though he competes with many other firms selling ice cream in Fairfield for the same customers. Peter's demand and cost values for sales per day are given in the table below. (Everyone who purchases Peter's ice cream buys a double scoop cone because it's so delicious.) -Refer to Scenario 16-3. How much profit will Peter earn each day if he chooses the price and quantity that maximize his profit? A) $176 B) $208 C) $225 D) $352 -Refer to Scenario 16-3. How much profit will Peter earn each day if he chooses the price and quantity that maximize his profit?


A) $176
B) $208
C) $225
D) $352

E) C) and D)
F) B) and D)

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Figure 16-11 Figure 16-11 -Refer to Figure 16-11. What, if any, long run adjustment will occur in this industry? -Refer to Figure 16-11. What, if any, long run adjustment will occur in this industry?

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firms will enter
pri...

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Figure 16-3 This figure depicts a situation in a monopolistically competitive market. Figure 16-3 This figure depicts a situation in a monopolistically competitive market. -Refer to Figure 16-3. How much output will the monopolistically competitive firm produce in this situation? A) 20 units B) 25 units C) 40 units D) 80 units -Refer to Figure 16-3. How much output will the monopolistically competitive firm produce in this situation?


A) 20 units
B) 25 units
C) 40 units
D) 80 units

E) A) and D)
F) B) and C)

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Figure 16-11 Figure 16-11 -Refer to Figure 16-11. If this firm profit-maximizes, how much output will it produce? -Refer to Figure 16-11. If this firm profit-maximizes, how much output will it produce?

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Table 16-7 A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to 20. Table 16-7 A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to 20. -Refer to Table 16-7. If this firm profit maximizes and faces a constant marginal cost of $7, does it have excess capacity? How do you know? -Refer to Table 16-7. If this firm profit maximizes and faces a constant marginal cost of $7, does it have excess capacity? How do you know?

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Yes, avera...

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Table 16-4 This table shows the demand schedule, marginal cost, and average total cost for a monopolistically competitive firm. Table 16-4 This table shows the demand schedule, marginal cost, and average total cost for a monopolistically competitive firm. -Refer to Table 16-4. At the profit-maximizing level of output, what is this firm's total cost? A) $10 B) $40 C) $88 D) $100 -Refer to Table 16-4. At the profit-maximizing level of output, what is this firm's total cost?


A) $10
B) $40
C) $88
D) $100

E) B) and C)
F) A) and C)

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Figure 16-9 The figure is drawn for a monopolistically-competitive firm. Figure 16-9 The figure is drawn for a monopolistically-competitive firm. -Refer to Figure 16-9. The quantity of output at which the MC and ATC curves cross is the A) efficient scale of the firm. B) short-run equilibrium quantity of output for the firm. C) long-run equilibrium quantity of output for the firm. D) All of the above are correct. -Refer to Figure 16-9. The quantity of output at which the MC and ATC curves cross is the


A) efficient scale of the firm.
B) short-run equilibrium quantity of output for the firm.
C) long-run equilibrium quantity of output for the firm.
D) All of the above are correct.

E) None of the above
F) B) and D)

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Which of the following statements is not correct?


A) Critics of advertising argue that firms advertise to manipulate consumers' tastes.
B) Defenders of advertising argue that advertising provides valuable product information to consumers.
C) An industry with many brand name products will be more competitive than one with many generic products.
D) The willingness of a firm to spend a large amount of money on advertising can signal the quality of the product.

E) A) and D)
F) None of the above

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Table 16-1 The following table shows the percentage of output supplied by the top eight firms in four different industries. Table 16-1 The following table shows the percentage of output supplied by the top eight firms in four different industries. -Refer to Table 16-1. What is the concentration ratio in Industry B? A) 18% B) 34% C) 61% D) 95% -Refer to Table 16-1. What is the concentration ratio in Industry B?


A) 18%
B) 34%
C) 61%
D) 95%

E) B) and C)
F) None of the above

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Figure 16-2. The figure is drawn for a monopolistically competitive firm. Figure 16-2. The figure is drawn for a monopolistically competitive firm. -Refer to Figure 16-2. Suppose ATC = $36 when Q = 24. Then the A) firm is in a long-run equilibrium when it produces 24 units of output. B) firm is in a long-run equilibrium when it produces 32 units of output. C) best the firm can do is sustain a loss of $48. D) best the firm can do is earn a profit of $96. -Refer to Figure 16-2. Suppose ATC = $36 when Q = 24. Then the


A) firm is in a long-run equilibrium when it produces 24 units of output.
B) firm is in a long-run equilibrium when it produces 32 units of output.
C) best the firm can do is sustain a loss of $48.
D) best the firm can do is earn a profit of $96.

E) None of the above
F) A) and C)

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The product-variety externality is associated with the


A) producer surplus that accrues to incumbent firms in a monopolistically competitive industry.
B) loss of consumer surplus from exposure to additional advertising.
C) consumer surplus that is generated from the introduction of a new product.
D) opportunity cost of firms exiting a monopolistically competitive industry.

E) A) and D)
F) A) and C)

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What is meant by the term "excess capacity" as it relates to monopolistically competitive firms?

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Monopolistically competitive f...

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The debate over the efficiency of markets in which products with brand names are sold


A) is framed by the role of regulation in advertising.
B) is likely to be resolved by reference to anecdotal evidence.
C) hinges on whether consumers are rational in their choices.
D) hinges on the effectiveness of advertising that identifies price differences.

E) C) and D)
F) A) and B)

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Figure 16-12 Figure 16-12 -Refer to Figure 16-12. If this firm minimized cost, how much output will it produce? -Refer to Figure 16-12. If this firm minimized cost, how much output will it produce?

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Table 16-7 A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to 20. Table 16-7 A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to 20. -Refer to Table 16-7. If this firm has a constant marginal cost of $7, what is the profit-maximizing level of output? -Refer to Table 16-7. If this firm has a constant marginal cost of $7, what is the profit-maximizing level of output?

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Figure 16-12 Figure 16-12 -Refer to Figure 16-12. How much cost per unit could this firm save by producing the efficient level of output rather than the profit-maximizing level of output? A) $0 B) $1 C) $2 D) $3 -Refer to Figure 16-12. How much cost per unit could this firm save by producing the efficient level of output rather than the profit-maximizing level of output?


A) $0
B) $1
C) $2
D) $3

E) A) and B)
F) A) and C)

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