QuizMaster

Which of the following is not an argument put forth by economists in support of the use of advertising ?

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Which of the following is not an argument put forth by economists in support of the use of advertising ?

A. Advertising increases competition
B. Advertising provides information to customers about prices, new products and location of retail outlets.
C. Advertising provides a creative outlet for artists and writers
D. Advertising provides new firms with the means to attract customers from existing firms.

The use of the word “monopoly” in the name of the market structure called “monopolistic competition” refers to the fact that ?

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The use of the word “monopoly” in the name of the market structure called “monopolistic competition” refers to the fact that ?

A. monopolistically competitive firms charge prices equal to their marginal costs just like monopolists
B. a monopolistically competitive firms faces a downward-slog demand curve for its differentiated product and so does a monopolist
C. monopolistically competitive markets have free entry and exit just like a monopolistic market
D. monopolistically competitive firms produce beyond their efficient scale and so do monopolists

When firms enter a monopolistically competitive market and the business-stealing externality is larger than the product-variety externality then ?

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When firms enter a monopolistically competitive market and the business-stealing externality is larger than the product-variety externality then ?

A. there are too many firms in the market and market efficiency could be increased if firms exited the market
B. the number of firms in the market is optimal and the market is efficient
C. There are too few firms in the market and market efficiency could be be increased with additional entry
D. The only way to improve efficiency in this market is for the government to regulate it like a natural monopoly.

Which of the following is true with regard to monopolistically competitive firms scale of production and pricing decisions Monopolistically competitive firms produce ?

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Which of the following is true with regard to monopolistically competitive firms scale of production and pricing decisions Monopolistically competitive firms produce ?

A. at the efficient scale and charge a price equal to marginal cost
B. at the efficient scale and charge a price above marginal cost
C. With excess capacity and charge a price above marginal cost
D. With excess capacity and charge a price equal to marginal cost

Which of the following is true regarding the production and pricing decisions of monopolistically competitive firms? Monopolistically competitive firms choose the quantity at which marginal cost equals ?

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Which of the following is true regarding the production and pricing decisions of monopolistically competitive firms? Monopolistically competitive firms choose the quantity at which marginal cost equals ?

A. marginal revenue and then use the demand curve to determine the price consistent with this quantity
B. average total cost and then use the supply curve to determine the price consistent with this quantity
C. marginal revenue and then use the supply curve to determine the price consistent with this quantity
D. average total cost and then use the demand curve to determine the price consistent with this quantity

Which of the following is true regarding the similarities and differences in monopolistic competition and monopoly ?

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Which of the following is true regarding the similarities and differences in monopolistic competition and monopoly ?

A. the monopolist faces a downward-slog demand curve while the monopolistic competitor faces an elastic demand curve
B. the monopolist charges a price above marginal cost while the monopolistic competitor charges a price equal to marginal cost
C. The monopolist makes economic profits in the long run while the monopolistic competitor makes zero economic profits in the long run
D. Both the monopolist and the monopolistic competitor operate at the efficient scale