Question 1 of 10

Many sellers of similar products is:

• A.

monopoly

• B.

oligopoly

• C.

monopolistic competition

• D.

perfect competition

Question 2 of 10

In comparison to perfect competition, monopolistic competition results in:

• A.

less output, at a lower price

• B.

less output, at a higher price

• C.

more output, at a higher price

Question 3 of 10

Monopolistic competition is inefficient because it results in a quantity of output:

• A.

where price exceeds marginal cost

• B.

where marginal social benefit exceeds marginal social cost

• C.

Both of the above

• D.

Neither of the above

Question 4 of 10

For a monopolistic competitor:

• A.

the demand curve and the marginal revenue curve are the same

• B.

price equals marginal revenue

• C.

the marginal revenue curve is twice as steeply downward sloping as the demand curve

• D.

Both b. and c. above

Question 5 of 10

A monopolistic competitor will maximize profits by producing the quantity of output where:

• A.

marginal revenue is equal to marginal cost

• B.

marginal revenue is maximized

• C.

total revenue is maximized

• D.

price is maximized

Question 6 of 10

Unlike perfect competition, monopolistic competition:

• A.

has similar but not identical products

• B.

has some degree of market power

• C.

Both of the above

• D.

Neither of the above

Question 7 of 10

Like perfect competition, monopolistic competition:

• A.

has many sellers

• B.

has identical products

• C.

has no market power

• D.

All of the above

Question 8 of 10

Product differentiation benefits a monopolistic competitor by:

• A.

increasing its market power

• B.

increasing the demand for its product

• C.

Both of the above

• D.

Neither of the above

Question 9 of 10

Compared to monopoly, monopolistic competition results in:

• A.

a larger deadweight loss

• B.

a smaller deadweight loss

• C.

the same size deadweight loss

Question 10 of 10

Compared to the economically efficient quantity of output, a monopolistic competitor:

• A.

underproduces

• B.

overproduces

• C.

produces the economically efficient quantity