Questions

Q11.1 Describe the monopolistically competitive market structure and provide some examples.

Q11.2 Describe the oligopolistic market structure and provide some examples.

Q11.3 Explain the process by which economic profits are eliminated in a monopolistically competitive industry as compared to a perfectly competitive industry.

Q11.4 Would you expect the demand curve for a firm in a monopolistically competitive industry to be more or less elastic after economic profits have been eliminated?

Q11.5 "One might expect firms in a monopolistically competitive industry to experience greater swings in the price of their products over the business cycle than those in an oligopolistic industry. However, fluctuations in profits do not necessarily follow the same pattern." Discuss this statement.

Q11.6 Will revenue-maximizing firms have short-run profits as large as or larger than profit-maximizing firms? If so, when? If not, why not?

Q11.7 Is short-run revenue maximization necessarily inconsistent with the more traditional long-run profit-maximizing model of firm behavior? Why or why not?

Q11.8 Why is the four-firm concentration ratio only an imperfect measure of market power?

Q11.9 The statement "You get what you pay for" reflects the common perception that high prices indicate high product quality and low prices indicate low quality. Irrespective of market structure considerations, is this statement always correct?

Q11.10 "Economic profits result whenever only a few large competitors are active in a given market." Discuss this statement.

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