Title: Microeconomics Final Flashcards | Quizlet
Headings: Microeconomics Final
Microeconomics Final
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Key concepts:
Terms in this set (31)
THIS SET IS OFTEN IN FOLDERS WITH...
Chapter 11
econ
MICRO FINAL
micro econ ch 13

Content: Product differentiation allows each firm some degree of monopoly power
The demand curve faced by a monopolistically competitive firm
is more elastic than the monopolist's demand curve
The monopolistically competitive seller's demand curve will become more elastic the
larger the number of competitors
Assume that in a monopolistically competitive industry, firms are earning economic profit. This situation will
attract other firms to enter the industry, causing the existing firms' profits to shrink
If monopolistically competitive firms in an industry are making an economic profit, then new firms will enter the industry and the product demand facing existing firms will
decrease
In the long run, the economic profits for a monopolistically competitive firm will be
the same as the profits for a purely competitive firm
Firms in an industry will not earn long run economic profit if
there is free entry and exit of firms in the industry
Compared to a purely competitive firm in long-run equilibrium, the monopolistic competitor has a: higher price and lower output
At long-run equilibrium in a monopolistic competition, there is: neither allocative nor productive efficency
productive efficiency
a situation in which a good or service is produced at the lowest possible cost
P = minimum ATC
allocative efficiency
the particular mix of goods and services most highly valued by society
P=MC
Pure Monopoly
Market model assumes the least number of firms in an industry
Market model that has a unique product that has no close subsitutes
pure monopoly
Monopolistic competition and Oligopoly
market models in which advertising are used the most often
Market model in which conditions of entry into the market are easiest
pure competition
Market model in which conditions of entry are most difficult
pure monopoly
The fast food industry is an example of this market model
monopolistic competition
The market for agricultural products such as wheat or corn would best be described by this market model
pure competiton
A purely competitive firm can be identified by the fact that
its average revenue equals its marginal revenue
The demand curve faced by a purely competitive firm
is the same as its marginal revenue curve
If a firm is a price taker, then the demand cruve for the firm's product is
perfectly elastic
In pure competition, the demand for the product of a single firm is perfectly: elastic because many other firms produce the same product
If a firm increases its output quantity when marginal revenue is less than marginal cost then its profits will
decrease
In the standard model of pure competition, a profit-maximizing firm will shut down in the short run if price is below
average variable cost
If the entry or exit of firms does not affect the resource prices in an industry, we refer to it as a: Constant-cost industry
The representative firm in a purely competitive industry
will earn zero economic profit in the long run
THIS SET IS OFTEN IN FOLDERS WITH...
Chapter 11
10 terms
jyoti30 PLUS
econ
32 terms
steven_campbell52
MICRO FINAL
121 terms
richfl126
micro econ ch 13
67 terms
Summer_Rains8
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