Vocab
True or False: The demand curve is the same as the Marginal cost curve.
False
The supply curve is equal to the Marginal cost curve.
True or False: In a monopolistic competitive market profits are maximized when Marginal cost is less than Marginal revenue (MC<MR)
False
Profits are instead maximized at MC=MR
True or False: The market for cars is a monopolistic competitive market.
True
Name a defining characteristic of a Monopolistic Competitive market.
Monopolistic competition has many firms selling differentiated products.
True or False the market for luxury watches is a monopolistic competitive market.
True
Which of the following markets would be considered a Monopolistic Competitive Market?
A. Crude Oil
B. Video Games
C. Wheat
D. Airlines From Salt Lake to Anchorage
B. Video Games
Explanation - Because each game is differentiated and anyone can enter the market who can program, the video game market would be considered a Monopolistic Competitive market.
True or False: Monopolistic Competitive Markets are Price Takers.
False
Because each product is different the firms have the power to choose prices.
What type of firm is most likely going to invest in high amounts of its resources into marketing?
A. Oligopolies
B. Monopolies
C. Monopolistic Competitive Firms
D. Competitive Market Firms
C. Monopolistic Competitive Firms
What type of market is the energy industry (Including all forms of energy: Hydro, oil, nuclear, solar, etc.)
Oligopoly