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Chapter 12: Monopolistic Competition
Final Exam Review
28
Economics
Undergraduate 1
04/24/2015

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Term
Low
Definition
______ concentration ratios are common in monopolistic competition.
Term
Monopolistic Competiton
Definition
A market in which many firms produce similar goods or services but each maintains some independent control of its own price.
Term
Downward sloping
Definition
The demand curve for a monopolistic competition is?
Term
output or price
Definition
In a monopolistic competition changes in the ________ of a single firm will have no perceptible influence on the sales of any other firm.
Term
low
Definition
In a monopolistic competition barriers of entry are ___.
Term
product differentiation
Definition
One notable feature that monopolistic competition has is ________.
Term
brand image
Definition
Each firm in a monopolistic competition has distinct identity also called _____________.
Term
monopoly on its brand image
Definition
In monopolistic competition, each firm has a _______ _________
Term
price-elastic
Definition
Brand loyalty makes the demand curve facing the firm less ________.
Term
low cross-price elasticity of demand
Definition
Brand loyalty implies ______________.
Term
Production Decision
Definition
The selection of the short-run rate of output (with existing plants and equipment).
Term
Economic Profit
Definition
The difference between total revenues and total economic costs.
Term
  • The industry cost curves shift to the right, pushing down price
  • The demand curves facing individual firms shift to the left¬†
Definition
When firms enter a monopolistically competitive industry:
Term
eliminate economic profits
Definition
Although each firm has some control over its own pricing decisions, entry-induced leftward shift of the demand curve facing the firm will ultimately ___________.
Term
economic profits
Definition
In the long run, there are no _______ _______ in monopolistic competition.
Term
efficient
Definition
Monopolistic competition tends to be less _____ in the long run than a perfectly competitive industry
Term
excess capacity
Definition
One issue that monopolistic competition faces:
Term
Marginal Cost Pricing
Definition
The offer (supply) of goods at prices equal to their marginal cost.
Term
"Blended Market"
Definition
A monopolistic market is also referred to as a _____ ________.
Term
Monopolistic firm.
Definition
80% of USA retailers qualify as this
Term
greater
Definition
Brand loyalty gives producers _____ control over price even though they still have to compete with other firms offering substitutes.
Term
zero
Definition
Entry into the industry stops when economic profits equal ____.
Term
Starbucks on every corner
Definition
An example of excessive capital.
Term
nonpricing
Definition
In an imperfect competition, firms engage in ______ competition
Term
perfectly
Definition
In truly _______ competitive industries, firms compete on the basis of price.
Term
many
Definition
There are _____ firms in  monopolistic competition
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