Product differentation: A. is successful if a firm faces a relatively inelastic demand curve B. if...
Product differentation:
A. is successful if a firm faces a relatively inelastic demand curve
B. if carried out successfully enables the firm to enjoy market power
C. cannot be accomplished through advertising or trivial product changes
D. does not allow the firm to raise its price without losing all of its customer
E. is carried out by both perfectely compettitive and monopolistically compettitive firms
Homework Answers
Product differentiation if carried out successfully enables the firm to enjoy market power. Hence, option(B) is correct.
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Product differentation:
A. is successful if a firm faces a relatively inelastic demand
curve
B. if...
The perfectly competitive firm's demand curve is: Perfectly elastic. Relatively elastic Perfectly inelastic. Relatively inelastic Statement...
The perfectly competitive firm's demand curve is: Perfectly elastic. Relatively elastic Perfectly inelastic. Relatively inelastic Statement 1: In the long run, firms in a monopolistically competitive industry will be producing that quantity that maximize social surplus. Statement 2: In the long run, firms in a monopolistically competitive industry will be producing at the minimum of its ATC curve. Statement (1) is true; statement (2) is false. Statements (1) and (2) are both true. Statement (1) is false; statement (2) is...
A monopolistically competitive firm faces the following demand curve for its product: 6 Price ($) Quantity...
A monopolistically competitive
firm faces the following demand curve for its product: 6 Price ($)
Quantity 10 2 9 4 8 6 7 8 5 12 4 14 3 16 2 18 1 20 10 Refer to the
Table. The firm has total fixed costs of $20 and a constant
marginal cost of $5 per unit. What will the firm do? a) It will
produce 2 units; firms will exit the market in the long run. b) It
will produce...
A monopolistically competitive firm faces the following demand curve for its product: 6 Price ($) Quantity...
A monopolistically competitive firm faces the following demand curve for its product: 6 Price ($) Quantity 10 2 9 4 8 6 7 8 5 12 4 14 3 16 2 18 1 20 10 Refer to the Table. The firm has total fixed costs of $20 and a constant marginal cost of $5 per unit. What will the firm do? a) It will produce 2 units; firms will exit the market in the long run. b) It will produce...
The demand schedule or curve confronted by the individual purely competitive firm is: 1. relatively elastic,...
The demand schedule or curve confronted by the individual purely competitive firm is: 1. relatively elastic, that is, the elasticity coefficient is greater than unity. 2. perfectly elastic. 3. relatively inelastic, that is, the elasticity coefficient is less than unity. 4. perfectly inelastic. Which of the following is not a characteristic of pure competition? 1. price strategies by firms 2. a standardized product 3. no barriers to entry 4. a larger number of sellers
5) A monopolist faces A) a perfectly elastic demand curve. B) a perfectly inelastic demand curve....
5) A monopolist faces A) a perfectly elastic demand curve. B) a perfectly inelastic demand curve. C) a horizontal demand curve. D) a downward-sloping demand curve. E) declining market share. 6) Which one of the following about a monopoly is false? A) A monopoly could make profits in the long run B) A monopoly could break even in the long run. C) A monopoly must have some kind of government privilege or government imposed barrier to maintain its monopoly. D)...
14) If a firm faces a downward-sloping demand curve a. it will always make a profit....
14) If a firm faces a downward-sloping demand curve a. it will always make a profit. b. it can control both price and quantity sold. c. it must reduce its price to sell more output. d. the demand for its product must be inelastic.
Table 16-7 A monopolistically competitive firm faces the following demand schedule for its product. In addition,...
Table 16-7 A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to $10. Price $15 $13 $11 $9 $7 $5 $3 Quantity 2 4 7 Refer to Table 16-7. If the firm has a constant marginal cost of $5 per unit, which of the following would you expect to occur in the long run in this market? O New firms will enter the market and profhts for firms...
QUESTION 2 The demand curve faced by a monopolistically competitive firm is: flat. kinked. upward-sloping. downward-sloping...
QUESTION 2 The demand curve faced by a monopolistically competitive firm is: flat. kinked. upward-sloping. downward-sloping QUESTION 3 Without a product differentiation, the demand curve for a monopolistically competitive firm would look like that of: O a monopoly firm. O a perfectly competitive firm. an oligopoly firm. a duopoly firm. QUESTION 4 Aside from advertising, how can monopolistically competitive firms increase demand for their products?! government edict. increasing its price. decreasing its price. Increasing the number of locations where it...
Suppose a firm has market power and faces a downward-sloping demand curve for its product, and...
Suppose a firm has market power and faces a downward-sloping demand curve for its product, and its marginal cost curve is upward sloping. If the firm reduces its price, then A. producer surplus increases due to new buyers, but the producer surplus from existing customers declines due to the lower price. B. the sum of producer and consumer surplus remains the same, but surplus value is transferred from the producer to consumers. C. the change in producer surplus is transferred...
15/19 A firm facing a horizontal demand curve: can increase its output as much as it...
15/19 A firm facing a horizontal demand curve: can increase its output as much as it wants at a given price. can affect the price it receives for its output faces a perfectly inelastic demand curve for its product cannot increase its output even if it wants to. is likely to price its goods below market price. CONTINUE 16/19 A profit-maximizing, perfectly competitive firm would never operate at an output level where. it would not cover all of its fixed...
The perfectly competitive firm's demand curve is: Perfectly elastic. Relatively elastic Perfectly inelastic. Relatively inelastic Statement 1: In the long run, firms in a monopolistically competitive industry will be producing that quantity that maximize social surplus. Statement 2: In the long run, firms in a monopolistically competitive industry will be producing at the minimum of its ATC curve. Statement (1) is true; statement (2) is false. Statements (1) and (2) are both true. Statement (1) is false; statement (2) is...
A monopolistically competitive
firm faces the following demand curve for its product: 6 Price ($)
Quantity 10 2 9 4 8 6 7 8 5 12 4 14 3 16 2 18 1 20 10 Refer to the
Table. The firm has total fixed costs of $20 and a constant
marginal cost of $5 per unit. What will the firm do? a) It will
produce 2 units; firms will exit the market in the long run. b) It
will produce...
A monopolistically competitive firm faces the following demand curve for its product: 6 Price ($) Quantity 10 2 9 4 8 6 7 8 5 12 4 14 3 16 2 18 1 20 10 Refer to the Table. The firm has total fixed costs of $20 and a constant marginal cost of $5 per unit. What will the firm do? a) It will produce 2 units; firms will exit the market in the long run. b) It will produce...
5) A monopolist faces A) a perfectly elastic demand curve. B) a perfectly inelastic demand curve. C) a horizontal demand curve. D) a downward-sloping demand curve. E) declining market share. 6) Which one of the following about a monopoly is false? A) A monopoly could make profits in the long run B) A monopoly could break even in the long run. C) A monopoly must have some kind of government privilege or government imposed barrier to maintain its monopoly. D)...
Table 16-7 A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to $10. Price $15 $13 $11 $9 $7 $5 $3 Quantity 2 4 7 Refer to Table 16-7. If the firm has a constant marginal cost of $5 per unit, which of the following would you expect to occur in the long run in this market? O New firms will enter the market and profhts for firms...
QUESTION 2 The demand curve faced by a monopolistically competitive firm is: flat. kinked. upward-sloping. downward-sloping QUESTION 3 Without a product differentiation, the demand curve for a monopolistically competitive firm would look like that of: O a monopoly firm. O a perfectly competitive firm. an oligopoly firm. a duopoly firm. QUESTION 4 Aside from advertising, how can monopolistically competitive firms increase demand for their products?! government edict. increasing its price. decreasing its price. Increasing the number of locations where it...
15/19 A firm facing a horizontal demand curve: can increase its output as much as it wants at a given price. can affect the price it receives for its output faces a perfectly inelastic demand curve for its product cannot increase its output even if it wants to. is likely to price its goods below market price. CONTINUE 16/19 A profit-maximizing, perfectly competitive firm would never operate at an output level where. it would not cover all of its fixed...
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