The number of firms in a monopolistically competitive industry means that
A) firms will collude.
B) existing firms in the industry will make sure new firms do not enter.
C) firms will not cooperate to set a pure monopoly price.
D) firms will try to set a common price.
C
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One defining characteristic of pure monopoly is that the ________.
A. monopoly produces a product with no close substitutes B. monopoly uses advertising C. entry into the industry is relatively easy, but exit is difficult D. monopoly is a price taker
Both Stan and Kyle own potato chip factories. Stan's factory has low fixed costs and high variable costs. Kyle's factory has high fixed costs and low variable costs. Currently, each factory is producing 5,000 bags of potato chips at the same total cost. Complete the following statement with the correct answer. If each produces
A. more, their costs will be equal. B. less, the costs of Kyle's factory will exceed those of Stan's factory. C. more, the costs of Kyle's factory will exceed those of Stan's factory. D. less, their costs will be equal.
Refer to Scenario 10.5. From the perspective of the firm, what is the marginal cost of the 5th garden hose?
A) 4 B) 5 C) 16 D) 12 E) 8
Firms in monopolistically competitive markets can differentiate their products on the basis of: a. brand identity
b. quality. c. convenience. d. all of the above.