[Solved] What Will Be the Long-Run Result of New Firms Entering

What does product differentiation mean? A)It is the attempt by the firm to offer a product similar to that of its rivals. B)It is the attempt by the firm to offer a product seen to be different from that of its rivals. C)It is the practice of many firms to sell more than one product. D)It is the practice of many firms to sell the same product in more than one market.

In which of the following market structures is entry easiest? A)Monopolistic competition. B)Oligopoly. C)Monopoly. D)Duopoly.

What price does a monopolistically-competitive firm charge? A)A price equal to marginal cost. B)A price greater than marginal cost. C)A price equal to average cost. D)A price less than average cost.

What is the level of economic profits earned by a firm operating in the short-run under conditions of monopolistic competition? A)It is positive. B)It is likely to be positive,but could be negative. C)It is zero. D)It is negative.

Graphically,what will be the effect of entry by new firms into a monopolistically-competitive industry? A)It will shift each firm's demand curve to the right. B)It will shift each existing firm's demand curve to the left. C)It will shift the market's supply curve to the left. D)It will shift the market's demand curve to the right.

What is meant by the term "allocative efficiency"? A)When a firm is producing an output that equals minimum AC. B)When a firm is producing an output and charging a price that equals minimum AC. C)When a firm is charging a price equal to MC. D)When a firm has achieved its MES.

All of the following,except one,are oligopoly industries.Which is the exception? A)The manufacture of automobiles. B)The manufacture of cigarettes. C)The provision of accounting services. D)The provision of long-distance telephone services.

All of the following statements,except one,are correct concerning the cartel variant of oligopoly theory.Which is the exception? A)An effective cartel restricts the supply of the product being sold. B)The individual members of the cartel must agree to and respect quotas on their output. C)The primary threat to the success of a cartel is government regulation. D)The output and the price of the cartel are often similar to that of a monopoly.

All of the following statements,except one,are correct about game theory analysis.Which is the exception? A)It has led some economists to conclude that the likelihood of cheating is a more effective barrier to collusion than government legislation. B)It emphasizes the importance of mutual interdependence. C)It is an attempt to explain firm behaviour. D)It shows that it is rational for each firm to trust the other. E)It is able to predict a likely outcome of two firms engaged in considering a specific action.

Most economic theory is based on the assumption that firms have one goal.Which of the following is that goal? A)Profit maximization. B)Continued growth of the corporation's sales and size of operations. C)The achievement of management autonomy in decision making. D)Development of state-of-the art technology. E)Enhancement of the company's image and the management's pride.