1.A monopolist produces ....

a.a socially efficient quantity of output, but at a higher price than in the perfectly competitive market

b.more than the socially efficient quantity of output, but at a higher price than in the perfectly competitive market

c.less than the socially efficient quantity of output, but at a higher price than in the perfectly competitive market

d.possibly more or possibly less than the socially efficient quantity of output, at a higher price than in the perfectly competitive market

2.The demand curve of the monopolistically competitive firm will become more elastic if ....

a.the barriers to entering the industry are more significant

b.the degree of product differentiation is greater

c.the number of competitors is larger

d.the number of competitors is smaller

3.What will occur if the monopolistically competitive firms increase their degree of product differentiation?

a.The firm's cost of falls

b.Each firm's demand becomes more inelastic

c.Each firm's marketing cost decreases

d.All firm's demand curves become flatter

4.If a monopolistically competitive firm can convince buyers that its product is unique, worth buying, and superior in quality than its competitors', ....

a.the firm's demand will become more inelastic

b.the firm's product has no close substitute

c.the firm can set the price above its marginal cost

d.all of the above are correct

5.The mutual interdependence in the oligopoly market arises because ....

a.The firms' products are differentiated

b.The firms' products are homogeneous

c.The firms tend to form a cartel

d.A small number of firms produce a large proportion of output in the industry

6.Which of the following is a characteristic of the oligopoly but NOT monopolistic competition?

a.Maximizing profit when MR = MC.

b.There are few firms in the market.

c.Relies on advertising and sales promotion.

d.Firms are price setters rather than price takers.