Chapter 11_2: Monopolistic Competition and Oligopoly

Chapter 11_2: Monopolistic Competition and Oligopoly; Time: 40 phút

Question 1: In monopolistic competition, firms can earn an economic profit in
a. the short run but not in the long run.
b. the short run and in the long run.
c. the long run but not in the short run.
d. neither the long run nor the short run.

Question 2 - 9

Question 2: In the above figure, if the firm is in monopolistic competition, it will produce
a. 100 units.
b. 40 units.
c. 60 units.
d. between 60 and 80 units.

Question 3: In the above figure, if the firm is in monopolistic competition, its price will be
a. 2
b. 4
c. 3
d. 1

Question 4: In the above figure, the monopolistically competitive firm earns an economic profit of
a. between $50.01 and $100 per day.
b. greater than $100.01 per day.
c. 0
d. between $0 and $50 per day.

Question 5: The above figure is for a firm in monopolistic competition. The diagram represents the short run rather than the long run because
a. the MR curve cuts the ATC curve from below.
b. the firm is earning an economic profit.
c. the MR curve and the D curve do not coincide.
d. the firm is incurring an economic loss.

Question 6: The figure above shows a monopolistically competitive firm in the short run. During the transition to the long run, the demand curve will shift ________ and the MR curve will shift ________.
a. rightward; leftward
b. rightward; rightward
c. leftward; leftward
d. leftward; rightward

Question 7: If all firms in a monopolistically competitive industry faced the same demand and cost curves pictured in the above figure,
a. new firms will enter the industry.
b. they would produce 60 units in total.
c. their economic profit would be zero.
d. some firms will exit the industry.

Question 8: In the above figure, the firm is a monopolistically competitive firm. In the long run, its economic profit will be
a. between zero and $50 per day.
b. greater than $50.0 per day.
c. zero.
d. some amount that cannot be determined without more information.

Question 9: The figure above could represent the long-run equilibrium for a
a. firm facing inelastic demand at all outputs.
b. monopolistically competitive firm.
c. perfectly competitive firm.
d. monopoly.

Question 10 - 13

Question 10: In the figure above, assuming that the firm does not shut down, the firm will produce
a. 40 units.
b. 30 units.
c. fewer than 20 units.
d. 20 units.

Question 11: In the figure above, assuming that the firm does not shut down, it will charge a price of
a. 4
b. 3
c. 2
d. 1

Question 12: In the figure above, the firm's economic
a. profit will be between $0 and $30 per day.
b. loss will be greater than $30 per day.
c. profit will be greater than $30.01 per day.
d. loss will be $30 or less per day.

Question 13: The figure above shows a firm in monopolistic competition. If all firms in the industry have the demand and cost curves illustrated in the figure,
a. some firms will enter the industry in the long run.
b. some firms will exit the industry in the long run.
c. firms will neither enter nor exit the industry in the long run.
d. we cannot tell if firms will enter or exit the industry in the long run.

Question 14: If the market served by a monopolistically competitive industry expands, a likely result in the long run will be
a. a higher ratio of price to average cost.
b. a larger number of firms producing a similar product.
c. less elastic demand curves facing each firm.
d. a transition from monopolistic competition to oligopoly.

Question 15: In the long run, a firm in a monopolistically competitive industry produces where its marginal cost
a. equals its price.
b. is less than its average cost.
c. equals its average cost.
d. exceeds its average cost.

Question 16: In the long run, a firm in monopolistic competition produces where the slope of the average total cost curve is
a. zero.
b. equal to the marginal cost.
c. positive.
d. negative.

Question 17: In the long run, a monopolistically competitive firm can earn
a. no economic profit, and neither can a monopoly.
b. an economic profit, but a monopoly cannot.
c. no economic profit, but a monopoly might.
d. an economic profit, and so can a monopoly.

Question 18: In monopolistically competitive industries,
a. firms are not sensitive to changes in consumer demand.
b. entry and exit push economic profits toward zero.
c. firms produce where marginal cost equals the marginal benefit to the consumers.
d. there is no diversity of products.

Question 19: In long-run equilibrium, a firm in monopolistic competition earns
a. a normal profit.
b. an economic profit but the economic profit is less than it would be if the firm was a monopoly.
c. an economic profit that is higher than what it would be if the firm was a monopoly.
d. an economic profit that is the same amount as it would be if the firm was a monopoly.

Question 20: In the long run, a firm in monopolistic competition will
a. earn a positive economic profit.
b. earn a negative economic profit, that is, an economic loss.
c. earn zero economic profit, that is, a normal profit.
d. None of the above answers is necessarily correct because the amount of the profit or loss depends on the slope of the demand curve.

Question 21: In the long run, all firms in a monopolistically competitive industry earn
a. zero accounting profit.
b. an economic profit.
c. negative accounting profit.
d. zero economic profit.

Question 22: In monopolistic competition, in the long run customers pay a price that is
a. equal to both the minimum ATC and the minimum AVC.
b. less than the minimum ATC.
c. equal to the minimum ATC, but not equal to the minimum AVC.
d. more than the minimum ATC.

Question 23: In the long run, a monopolistically competitive firm's price equals its
a. marginal cost but not its average total cost.
b. average total cost and its marginal cost.
c. average total cost but not its marginal cost.
d. neither marginal cost nor its average total cost.

Question 24: In long-run equilibrium, a firm's price definitely equals its average total cost in both
a. perfect competition and monopolistic competition.
b. oligopoly and monopoly.
c. perfect competition and monopoly.
d. oligopoly and monopolistic competition.

Question 25: In the long run, a firm in a monopolistically competitive industry has its price equal to its
a. marginal cost.
b. marginal revenue.
c. elasticity of demand.
d. average total cost.





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