Question :
21) According to a Wall Street Journal article, hhgregg has : 1244640
21) According to a Wall Street Journal article, hhgregg has differentiated itself from its competition, particularly from large chain stores such as Best Buy
A) by charging lower prices.
B) by providing better customer service.
C) by selling inferior products.
D) by offering discounts for cash sales.
22) The financial situation at Starbucks in the late 2000s illustrates the fact that maintaining long-run profits in a monopolistically competitive market is
A) impossible.
B) very difficult.
C) fairly easy.
D) almost always guaranteed.
23) In theory, in the long run, monopolistically competitive firms earns zero profits. However, in reality there are some ways by which a firm can avoid losing profits. Which of the following is one such way?
A) gradually increase the mark up on the goods produced
B) lower the price of its products to expand its market share
C) identify new markets and develop products precisely for those markets
D) find a market niche and keep it as narrow as possible so as to prevent other producers from entering this market segment
24) Tony’s Italian Ice is a monopolistically competitive firm. If Tony’s earns a profit in the short run, which of the following is most likely to occur?
A) New firms that sell Italian ice will enter the market and Tony’s cost curves will shift to the left.
B) New firms that sell Italian ice will enter the market and Tony’s demand curve will shift to the left.
C) New firms that sell Italian ice will enter the market and Tony’s demand curve will shift to the right.
D) New firms that sell Italian ice will enter the market and Tony’s demand curve will become more inelastic.
25) Which of the following describes the relative positions of the demand curve and the average total cost (ATC) curve of a monopolistically competitive firm that earns a profit in the short run?
A) In the short run, the firm’s demand curve will lie above its ATC curve. The demand curve will be tangent to the ATC curve in the long run.
B) In the short run, the firm’s demand curve will lie below its ATC curve. The demand curve will be tangent to the ATC curve in the long run.
C) In the short run, the firm’s demand curve will cross its ATC curve at the ATC curve’s lowest point. The demand curve will be above the ATC curve in the long run.
D) In the short run, the firm’s ATC curve will cross the demand curve at the profit maximizing level of output. The demand curve will be tangent to the ATC curve in the long run.
26) If firms in a monopolistically competitive industry are making profits in the short run
A) barriers to entry will be erected to keep out rivals.
B) some firms will ultimately exit the industry.
C) they will resort to advertising wars to help sustain these profits.
D) new firms will enter the market.
27) A monopolistically competitive firm that earns an accounting profit in the short run
A) must also earn an economic profit in the short run.
B) does not earn enough to earn an economic profit in the short run.
C) could earn an economic profit, break even or suffer an economic loss in the short run.
D) could earn an economic profit or break even, but could not suffer an economic loss in the short run.
28) In the long run, if the demand curve of a monopolistically competitive firm is tangent to its average total cost curve then
A) the firm would break even.
B) the firm would shut down temporarily.
C) the firm would earn enough revenue to cover its variable costs, but not its fixed costs.
D) the firm would earn an economic profit.
29) Which of the following would not occur as a result of a monopolistically competitive firm suffering a short-run economic loss?
A) The firm could exit the industry in the long run.
B) If the firm does not exit the industry in the long run its demand curve will shift to the left.
C) If the firm does not exit the industry in the long run its demand curve will shift to the right.
D) If the firm remains in the industry in the long run it will break even.
30) One reason Starbucks experienced a decline in sales in the late 2000s is because
A) the product they offered was becoming less differentiated from their competitors’ products.
B) the coffeehouse market transitioned from being monopolistically competitive to perfectly competitive.
C) barriers to entry became more restrictive in the coffeehouse market.
D) the number of competitors in the market declined dramatically.
