1) In some monopolistically competitive markets, differentiation is obtained sim

Question

1) In some monopolistically competitive markets, differentiation is obtained simply by location. Which of the followings is a good sample of differentiation by location?

Select one: a. gas stations b. movie theaters Incorrect c. music stores d. All of these

2) Recall the Application about the price competition between satellite and cable TV services to answer the following question(s). Recall the Application. In most cases where satellite TV service is introduced in an area with cable TV service, the price of the cable TV service usually:

Select one: a. increases. b. decreases. c. initially increases, then decreases. d. is unaffected. Incorrect

3)Recall the Application about South African consumer lender that offered different interest rates in loan offers via mass mailings answer the following question(s). According to the Application, the number of women who accepted a particular loan offer from the mass mailings ________ when the offer letter included the picture of a ________.

Select one: a. increased; man rather than the picture of a woman b. increased; woman rather than the picture of a man Incorrect c. decreased; either a man or a woman d. was unaffected; either a man or a woman

4)Recall the Application about the price competition between satellite and cable TV services to answer the following question(s). Recall the Application. In most cases where satellite TV service is introduced in an area with cable TV service, the quality of the cable TV service usually:

Select one: a. increases. b. decreases. c. initially increases, then decreases. d. is unaffected. Incorrect

5)If a firm is operating in a monopolistically competitive market, then in the long-run:

Select one: a. the firm will earn a zero economic profit. b. the firm will maximize its profit by producing the output level at which the average cost is minimized. c. the firm will maximize its profit by producing the output level at which the marginal revenue is minimized. d. All of these Incorrect

6)When the government eliminates artificial barriers to entry:

Select one: a. more firms will enter the market. b. prices to consumers will likely increase. c. competition in the market will decrease. d. All of these will occur. Incorrect

Explanation / Answer

Q1. Out of given options, gas stations is a good sample of differentiation by location.

Even though, each gas station generally give more or less same product that is gasoline, its location impacts the revenue.

Gas stations located along the higways or major roads or busy roads tends to earn more than the gas stations that are located far-off from highways or along the roads with less traffic.

Thus, the correct answer is option (a).

Q5. If a firm is operating in a monopolistically competitive market then in long-run it produces that level of output at which average revenue equals average cost. The equality of average revenue and average cost results in normal profit or zero ecnomic profit for monopolistically competitive firm in the long-run.

Hence, the correct answer is option (a).

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.