Characteristics of Monopolistic Competition quiz #1 Flashcards
Characteristics of Monopolistic Competition quiz #1
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Which market structure predominantly uses product differentiation to attract consumers? Monopolistic competition predominantly uses product differentiation to attract consumers. Which of the following is a characteristic of monopolistic competition? Firms sell similar but differentiated products. Who sets the price in a monopolistic competition? Each firm has some control over the price of its own differentiated product. Which of the following is true of a monopolistically competitive firm in long-run equilibrium? Firms earn zero economic profit due to free entry and exit. Which of the following is not a characteristic of monopolistic competition? Identical products sold by all firms. What will happen to a monopolistically competitive firm in the long run? It will earn zero economic profit as new firms enter and compete away profits. Which of the following are characteristics of a monopolistically competitive industry? Product differentiation, many sellers, and low barriers to entry. Which of the following are typical characteristics of monopolistic competition? Many firms, differentiated products, and free entry and exit. What is true about firms in monopolistic competition in the short-run? Firms can earn positive, negative, or zero economic profit in the short run. In which market structure are products similar but differentiated through branding? Monopolistic competition. Which of the following is true of monopolistically competitive firms in long-run equilibrium? Firms make zero economic profit due to free entry and exit. Why does each monopolistically competitive firm generally have limited control over market price? Because there are many close substitutes and competitors. Which industry would be best characterized as monopolistically competitive? The fast food industry. Which of the following is true of a monopolistically competitive firm in long-run equilibrium? It earns zero economic profit. Which of the following industries is most likely to be monopolistically competitive? Coffee shops. Which of the following is not a basic characteristic of monopolistic competition? High barriers to entry. Which of the following best describes the efficiency of monopolistically competitive firms? They are less efficient than perfectly competitive firms due to excess capacity. Which of the following is not a key feature of monopolistic competition? A single seller dominates the market. Which statement concerning monopolistic competition is false? Firms sell identical products. A good example of a monopolistically competitive market would be? The restaurant industry. Which aspect of monopolistic competition gives consumers more choice? Product differentiation. In which way do producers try to differentiate themselves in monopolistic competition? Through branding, quality, and unique features. Which of the following statements best describes firms under monopolistic competition? Firms have some market power due to differentiated products. Which of these businesses is operating in monopolistic competition? A local coffee shop. Which of the following is true of a monopolistically competitive firm in long-run equilibrium? It earns zero economic profit. Monopolistically competitive firms are able to have some control over the price of their products. True, due to product differentiation. Which of the following is true of a monopolistically competitive firm in long-run equilibrium? It earns zero economic profit. Demand in a monopolistically competitive market is typically... Downward sloping. Which of the following is true of a monopolistically competitive firm in long-run equilibrium? Firms earn zero economic profit. In the long run, economic theory predicts that a monopolistically competitive firm will... Earn zero economic profit due to entry of new firms. One difference between monopolistic competition and pure competition is that... Products are differentiated in monopolistic competition but identical in pure competition. A monopolistically competitive firm chooses... Its price and output based on its own demand curve. Monopolistic competition is an industry characterized by... Many firms selling differentiated products with low barriers to entry. Monopolistically competitive industries are inefficient because... Firms do not produce at minimum average cost and have excess capacity. In which market structure are products similar but differentiated through branding, quality, etc.? Monopolistic competition. Which of the following industries is the best real-world example of monopolistic competition? Fast food restaurants. A monopolistically competitive industry is characterized by... Many firms, differentiated products, and free entry and exit. Monopolistic competition is characterized by firms... Having some control over price due to product differentiation. High product differentiation is generally accompanied by... Some market power for each firm. Under monopolistic competition, entry to the industry is... Relatively easy due to low barriers.
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