TRUE or FALSE 31. Monopolistic competition is more similar to monopoly than any
ID: 1173276 • Letter: T
Question
TRUE or FALSE
31.Monopolistic competition is more similar to monopoly than any other industry model.
32.Monopolistic competition, like perfect competition, is a market structure in which firms can easily enter and leave the industry.
33.By differentiating their products and promoting brand name loyalty, monopolistically competitive firms can raise prices without losing all their customers.
34. Monopolistically competitive sellers have some ability to influence the price of their products.
35. Monopolistically competitive sellers are price takers.
36. Monopolistic competitors in long-run equilibrium will generally find that they are earning economic profits.
37. In long-run equilibrium, a monopolistically competitive firm's demand curve will be tangent to its average cost curve.
38. Unlike purely competitive firms, firms in monopolistic competition will operate with excess capacity even in long-run equilibrium.
39. In the long run, monopolistically competitive firms typically produce with allocative efficiency.
40. Although there are certain inefficiencies associated with monopolistic competition, society receives a benefit from monopolistic competition in the form of product variety.
41. Oligopoly is an industry with a small number of firms producing homogeneous or differentiated goods with minimal barriers to entry.
42. When making decisions on pricing and other behaviors, oligopolistic firms must take into account the actions of other firms.
43. The U. S. commercial airline industry is a good example of an oligopolistic market.
44. Economists consider the breakfast food industry to be an oligopolistic market.
45. There are significant technological barriers to entry that help make the automobile industry oligopolistic.
46. The key difference between oligopoly and other market structures is the interdependence among producers.
47. Large oligopoly firms are often able to take advantage of significant economies of scale. As a result, they can often produce at a lower average total cost than can smaller firms.
48. A cartel is a group of firms that attempt to collude by coordinating price and output decisions
Ill give you the points right aaway with a great review if you answer them all, Thank You !
Explanation / Answer
31) False (That would be oligopoly) 32) True (few barriers to entry) 33) True (this is why there is so much advertising) 34) True (but only in the short term) 35) False (they are not price takers in the short term) 36) False (Because new entrants will compete in the market, monopolistic competitive firms will earn no profit in the long run) 37) True (The demand and ATC curves will touch, but not cross) 38) True (Because they are inefficient) 39) False (Even in the long run, monopolistic competitive firms will still charge prices above marginal cost, and thus never produce at the socially optimal level) 40) True (Because firms must differentiate to remain competitive) 41) False (there are great barriers to entry0 42) True (because they are providing such similar goods) 43) True (A few carriers all providing a very similar service) 44) True (A few cereal companies with well-established brand recognition) 45) True (although these are not the only barriers to entry in automotive manufacturing) 46) False (oligopolies are competitors, not conspirators) 47) True (the smaller and more competitive the firm, the more difficulty it has keeping up with ATC) 48) True (think OPEC)
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