In monopolistic competition, each firm:A) is a price-taker.B)
has some ability to set the price of its differentiated good.
C) will set price equal to marginal cost.D) has marginal revenue that is greater than price.11.
A firm that experiences economies of scale:A) at lower levels of output and then encounters diseconomies of scale at higher levels of output is a naturalmonopoly.B)
over the entire range of outputs demanded is called a natural monopoly.
C) at any particular level of output is called a natural monopoly.D) has a continually rising long-run average cost curve.12.
After the first unit sold, the marginal revenue a monopolist receives from selling one more unit of a good is lessthan the price at which that unit is sold because of:A) diminishing marginal returns.B) increasing marginal cost.C)
a downward-sloping demand curve.
D) declining average fixed cost.13.
A demand curve that is downward sloping will ensure that:A)
If the only two firms in an industry openly agree to fix the price or output level, then this is an example of:A)
B) price leadership.C) perfect competition.D) tacit collusion.15.
The women's dress industry is monopolistically competitive. This means that the following condition applies to thisindustry:A) There are thousands of dress suppliers, all selling identical products.B)
Dresses tend to be differentiated among the many sellers serving this market.
C) There is freedom of entry but not exit in this industry.D) Prices tend to be lower than if the dress industry approximated perfect competition.16.
If a firm has market power, the marginal revenue curve always lies below the demand curve.A)
Each firm in a cartel has an incentive to break its word and produce more than the agreed quantity.A)
Compared to a perfectly competitive industry, a monopolist:A) produces a large quantity.B)
charges a higher price.
C) increases consumer surplus.D) earns less profit in the long run.