1.

R-1 REF 25-15 (F25083)

Refer to the above graph. A successful advertising campaign by a monopolistically competitive firm will cause the demand curve to shift from:
A.A to B and become more elastic.
B.A to B and become less elastic.
C.B to A and become more elastic.
D.B to A and become less elastic.



2.

R-2 REF 25-27

For the monopolistically competitive firm depicted above, it can be said that the firm is:
A.making economic profit in the long run.
B.making economic profit in the short run.
C.earning only normal profit in the long run.
D.earning only normal profit in the short run.



3.
Answer the next question(s) based on the demand and cost schedules for a monopolistic competitor given in the table below.

Quantity
PricedemandedTotal costOutput
$201$101
182202
163293
144364
125405
106426
R-3 REF 25-30 (REF25027)

Refer to the above table. What output will the profit-maximizing monopolistic competitor produce?
A.3
B.4
C.5
D.6



4.

R-4 REF 25-36 (F25033)

Refer to the above graph of a representative firm in monopolistic competition. What does line 1 represent?
A.demand
B.marginal cost
C.marginal revenue
D.average total cost



5.
Answer the next question(s) on the basis of the following demand and cost data for a specific firm.

Demand DataCost Data
(1)(2)(3)TotalTotal
PricePriceQuantityOutputCost
$50$3522$45
45303355
40254470
35205590
301566115
251077145
20588180
R-5 REF 25-40 (REF25037)

Refer to the above data. If columns 1 and 3 are this firm's demand schedule, the profit-maximizing level of output will be:
A.3 units.
B.4 units.
C.5 units.
D.6 units.



6.

R-6 REF 25-50

The graph above represents a monopolistically competitive firm in a constant-cost industry. In long-run equilibrium this firm will:
A.continue to earn economic profits because it has monopolistic power to set its price.
B.become a perfectly competitive firm because there are no significant barriers to entry.
C.break even because average total cost (ATC) and marginal cost (MC) will increase as more firms enter the market.
D.break even because its demand curve will fall and become more elastic as it loses sales to other firms entering the market.



7.

R-7 REF 25-57 (F25053)

Refer to the above graph of the representative firm in monopolistic competition. The intersection of marginal cost and average total cost is represented by point:
A.a.
B.b.
C.c.
D.d.



8.

R-8 REF 25-77

Assume that in long run equilibrium a purely competitive firm has the same cost curves as that of the monopolistically competitive firm in the graph above. It can be concluded that the:
A.purely competitive firm would have lower profits.
B.purely competitive firm would have higher profits.
C.purely competitive producer would produce less at a higher ATC.
D.monopolistically competitive producer would produce less at a higher ATC.




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