9. If a firm sells its output on a market that is characterized by a single seller and many buyers of a homogeneous product for which there are no close substitutes and barriers to long-run resource mobility, then the firm is: O a. A monopolist. O b. An oligopolistic C. A perfect competitor d. A monopolistic competitor:

Intel and Advanced Micro Devices make most of the chips that power a PC. What makes the market for PC chips a duopoly? The PC chip market is a duopoly if O A. at the efficient scale, two firms can satisfy the market demand OB. each firm can divide its consumers into two categories-business consumers and household consumers O C. the two firms can charge different prices for the same quality of PC chip O D. the market produces two goods Assume that Intel and Advanced Micro Devices have identical costs. The graph shows the market demand curve. Draw the average total cost curve of one firm if the chip market produces 800 chips an hour and other firms are prevented from entering. Label the curve. Draw a point on the average total cost curve at the efficient scale. 110- 100- 90- 80+ 70- 60+ 50- 40- 30- 20+ 10- 0- Price (dollars per chip) 0 $800 200 400 800 600 Quantity (chips per hour) >>> Draw only the objects specified in the question. D 1000 Q Q 1200

Exhibit 10.5 Price 3.25 3.00 2.50 0 700 1,000 MC MR ATC D = AR Quantity Exhibit 10.5 shows the demand, marginal revenue, and cost curves for a monopolistically competitive firm. At the profit-maximizing (or loss-minimizing) output and price, the firm would O a. have to expand to stay in business in the long run. O b. be better off shutting down, since total revenue does not cover fixed costs. O c. be experiencing an economic loss. O d. be earning an economic profit. O e. be earning zero economic profit.

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Suppose that total demand for refrigerators at the market price is 15,000 units. If the LRAC curve reaches a clear minimum average cost at 5,000 units, then the industry structure must be Select the correct answer below: O perfectly competitive O a monopoly O an oligopoly O monopolistically competitive

The theory of monopolistic competition explains economic behaviour in industries in which there are O A. a few small firms, each with some market power. O B. many small firms, each with some market power. O C. many small firms, each with no market power. O D. a few small firms, each with no market power. O E. None of the above.

Fill in the blank and answer in 5-6 sentence only

The firm in the figure below is in monopolistic competition. It will set a price equal to MC ATC MR D 0 10 20 30 40 50 60 Quantity (units per day) O a. $1. O b. $3. O c. more than $3. O d. $2. Price and costs (dollars per unit)

3. Is monopolistic competition efficient? Suppose that a firm produces wooden train engines in a monopolistically competitive market. The following graph shows its demand curve, marginal- revenue (MR) curve, marginal-cost (MC) curve, and average-total-cost (ATC) curve. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with that cost. ? PRICE (Dollars per engine) 100 90 80 70 60 50 40 30 20 10 MC ATC MR 0 + Demand H 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of engines) Mon Comp Outcome Min Unit Cost Because this market is a monopolistically competitive market, you can tell that it is in long-run equilibrium by the fact that optimal quantity for each firm. Furthermore, the quantity the firm produces in long-run equilibrium is True or False: This indicates…

Which of the following market types has all firms selling products so identical that buyers do not care from which firm they buy? Select one: O a. monopolistic competition O b. oligopoly O c. monopoly O d. perfect competition