Review
4. Each of the statements below describes a characteristic of the
following market structures: perfect competition, monopolistic
competition, oligopoly, and monopoly. Identify which market
structure displays each of the characteristics. (There may be more
than one.)
a. Each firm faces a downward-sloping demand curve.
b. Price is greater than marginal revenue.
c. Each firm produces at MES in long-run equilibrium.
d. Firms earn profit in long-run equilibrium.
e. Firms produce a homogeneous product.
f. Firms advertise their product.
g. Each firm produces output where.
h. Each firm produces output where.
i. There is free entry to the industry.
j. Firms produce a differentiated product.
5. Do you think any of the following industries might be
monopolistically competitive? Why or why not?
a. Textbook publishing (approximately 10 introductory
economics textbooks are in use on campuses in this year)
b. Post-secondary education
c. Cigarette manufacturing
d. Restaurant operation
e. Automobile retailingMC=MR
P=MC