ECON 101: Chapter 14 QUESTION AND ANSWERS
VERIFIED 100% CORRECT (every answer is at the top of
question)
B
1) The best example of a good sold in a monopolistically competitive market is
A) the local newspaper.
B) pizza.
C) sewer services.
D) peaches.
A
2) Product differentiation exists within an industry if
A) there are close but not perfect substitutes for a product.
B) there are no substitutes for a product.
C) the firm can sell all it wants at the chosen price.
D) there is a monopoly.
C
3) In monopolistic competition
A) collusion is possible.
B) each firm's price cannot deviate from the average price of other firms. C) each firm
supplies a small part of the total market output.
D) one firm's actions directly affect the actions of the other firms.
D
4) Dole Co. operates in a monopolistically competitive market. Which of the following
characterizes Dole Co.'s market?
A) Dole Co.'s product is slightly different from its competitors.
B) Dole Co. faced no barrier to entry when it decided to enter its market.
C) Dole Co. supplies a small portion of the market's output.
D) All of the above describe Dole Co.'s market.
C
5) Firms in monopolistic competition can achieve product differentiation by A)
setting the price equal to average revenue.
B) expanding plant size.
C) advertising special characteristics.
, D) exploiting economies of scale in production.
A
6) Which of the following is NOT a characteristic of monopolistic competition? A)
Entry and exit is restricted.
B) Firms compete on price.
C) A large number of firms compete.
D) Firms compete on product quality.
B
7) In monopolistic competition
A) one firm's actions directly affect the actions of the other firms.
B) each firm's price can deviate from the average price of other firms.
C) each firm supplies a large part of the total market output.
D) firms typically determine the amount they produce through agreements with
competitors.
B
8) The above figure shows the demand and cost curves for a monopolistically
competitive firm in the long run. The firm has excess capacity of A)
4 units.
B) 8 units.
C) $10.
D) 16 units.
D
The figure shows the demand curve for Gap jackets (D), and Gap's marginal revenue
curve (MR), marginal cost curve (MC), and average total cost curve (ATC). 19) In the
figure above, Gap maximizes its profit if it sells ________ jackets per day. A) 64
B) 133
C) 129 D) 100
VERIFIED 100% CORRECT (every answer is at the top of
question)
B
1) The best example of a good sold in a monopolistically competitive market is
A) the local newspaper.
B) pizza.
C) sewer services.
D) peaches.
A
2) Product differentiation exists within an industry if
A) there are close but not perfect substitutes for a product.
B) there are no substitutes for a product.
C) the firm can sell all it wants at the chosen price.
D) there is a monopoly.
C
3) In monopolistic competition
A) collusion is possible.
B) each firm's price cannot deviate from the average price of other firms. C) each firm
supplies a small part of the total market output.
D) one firm's actions directly affect the actions of the other firms.
D
4) Dole Co. operates in a monopolistically competitive market. Which of the following
characterizes Dole Co.'s market?
A) Dole Co.'s product is slightly different from its competitors.
B) Dole Co. faced no barrier to entry when it decided to enter its market.
C) Dole Co. supplies a small portion of the market's output.
D) All of the above describe Dole Co.'s market.
C
5) Firms in monopolistic competition can achieve product differentiation by A)
setting the price equal to average revenue.
B) expanding plant size.
C) advertising special characteristics.
, D) exploiting economies of scale in production.
A
6) Which of the following is NOT a characteristic of monopolistic competition? A)
Entry and exit is restricted.
B) Firms compete on price.
C) A large number of firms compete.
D) Firms compete on product quality.
B
7) In monopolistic competition
A) one firm's actions directly affect the actions of the other firms.
B) each firm's price can deviate from the average price of other firms.
C) each firm supplies a large part of the total market output.
D) firms typically determine the amount they produce through agreements with
competitors.
B
8) The above figure shows the demand and cost curves for a monopolistically
competitive firm in the long run. The firm has excess capacity of A)
4 units.
B) 8 units.
C) $10.
D) 16 units.
D
The figure shows the demand curve for Gap jackets (D), and Gap's marginal revenue
curve (MR), marginal cost curve (MC), and average total cost curve (ATC). 19) In the
figure above, Gap maximizes its profit if it sells ________ jackets per day. A) 64
B) 133
C) 129 D) 100
