In a monopolistic competitive market how many firms are there? A. Fairly large number of firms with different degrees of market power B. Large number of firms with a high degree of market power C. Fairly large number of firms each with little bit of market power D. Farily large number of firms, with each having no market power.

2. What type of products will firms produce in monopolistic competition?A. Firms produce significantly differentiated products B. Firms produce slightly differentiated products C. Firms produce homogenous products with one modification D. Firms produce a variety of different products

3. How can products be differentiated? A. Brand name B. Colour C. Appearance D. Packaging design E. All of the above.

4. Which of the following is an example of a monopolistic competitive industry? A. Car Mechanics B. Break cereal market C. MP3 player market D. Pilots

5. Which of these graphs correctly illustrates a monopolistic competition in long-run equilibrium

. Which of the following statements correctly identifies a difference between perfect competition and monopolistic competition? A. In perfect competition, goods are identical, but goods are slightly differentiated in monopolistic competition. B. In perfect competition, there are many buyers and many sellers, but in monopolistic competition there are few buyers and few sellers. C. In perfect competition, there are barriers to entry, but there are no barriers to entry in monopolistic competition. D. In perfect competition, firms markup the price of their good, but in monopolistic competition firms cannot markup the price of their good.

7. Which types of firms are allocatively inefficient in the long run? A. a perfectly competitive firm and monopolistic competition B. a single price monopoly and monopolistic competition C. an oligopoly and a perfectly competitive firm D. a perfect price-discriminating monopolist and monopolistic competition

8. Murphy's Muffins sells banana nut muffins in an industry that is monopolistically competitive. The industry is currently in long-run equilibrium. Which of the following terms describes the difference between the cost-minimizing quantity and the quantity that Murphy's Muffins actually produces? A. zero economic profits B. deadweight loss C. surplus quantity D. excess capacity

9. Consider a market with demand and cost curves characterized by Q(P) = 17 - P and C = 5Q respectively. The market is served by 5 identical firms which operate as a Cournot Oligopoly. Find the total quantity, price, profit, consumer surplus and deadweight loss in this market.