Topic 11 Monopolistic Competition and Oligopoly Assignment 1
1. Which of the following best represents the pricing behavior of firms in a monopolistically
competitive industry?
Teen Angle Hardware looks for a niche to sell its hardware products to teens but
finds it difficult to earn anything more than normal profits due to other hardware
stores also looking for niches.
2. What is one difference between a firm in a perfectly competitive industry and a firm in a
monopolistically competitive industry?
A monopolistically competitive firm does not have the exact same product as other
firms
3. What is one difference between a firm in a perfectly competitive industry and a firm in a
monopolistically competitive industry?
A monopolistically competitive firm faces competition from firms producing close
substitutes
4. Andrei opens a small Russian tea room in downtown Minneapolis. He advertises that he
uses a secret blend of exotic tea leaves to make his unique tea. The daily demand for cups
of his Russian tea is described in the table below.
Demand Facing Andrei's Russian Tea Room
Quantity of Tea
Price Demanded
(dollars) (cups)
$5.00 0
4.50 10
4.00 20
3.50 30
3.00 40
2.50 50
2.00 60
1.50 70
This study source was downloaded by 100000871695925 from CourseHero.com on 10-26-2023 13:02:23 GMT -05:00
https://www.coursehero.com/file/44349872/Topic-11-Monopolistic-Competition-and-Oligopoly-Assignment-4docx/
, Topic 11 Monopolistic Competition and Oligopoly Assignment 2
Examine the four tables below, tables A–D
Table A Table B Table C Table D
Quantity of Quantity of Quantity of Quantity of
Tea Tea Tea Tea
Price Demanded Price Demanded Price Demanded Price Demanded
(dollars) (cups) (dollars) (cups) (dollars) (cups) (dollars) (cups)
$6.00 0 $5.00 5 $4.00 0 $5.50 0
5.70 10 4.70 20 3.50 10 5.00 10
5.40 20 4.40 35 3.00 20 4.50 20
5.10 30 4.10 50 2.50 30 4.00 30
4.80 40 3.80 65 2.00 40 3.50 40
4.50 50 3.50 80 1.50 50 3.00 50
4.20 60 3.20 95 1.00 60 2.50 60
3.90 70 2.90 110 0.50 70 2.00 70
a. Which table best represents what is likely to happen to the demand for Andrei's tea if
other Russian immigrants also open tea rooms in Minneapolis?
Table C
b. Which of the following scenarios is most likely to increase the demand for Andrei’s tea
and make it less elastic?
Andrei’s tea wins the “Best Tea in the Midwest” award in Tea Lover’s Digest.
This study source was downloaded by 100000871695925 from CourseHero.com on 10-26-2023 13:02:23 GMT -05:00
https://www.coursehero.com/file/44349872/Topic-11-Monopolistic-Competition-and-Oligopoly-Assignment-4docx/
1. Which of the following best represents the pricing behavior of firms in a monopolistically
competitive industry?
Teen Angle Hardware looks for a niche to sell its hardware products to teens but
finds it difficult to earn anything more than normal profits due to other hardware
stores also looking for niches.
2. What is one difference between a firm in a perfectly competitive industry and a firm in a
monopolistically competitive industry?
A monopolistically competitive firm does not have the exact same product as other
firms
3. What is one difference between a firm in a perfectly competitive industry and a firm in a
monopolistically competitive industry?
A monopolistically competitive firm faces competition from firms producing close
substitutes
4. Andrei opens a small Russian tea room in downtown Minneapolis. He advertises that he
uses a secret blend of exotic tea leaves to make his unique tea. The daily demand for cups
of his Russian tea is described in the table below.
Demand Facing Andrei's Russian Tea Room
Quantity of Tea
Price Demanded
(dollars) (cups)
$5.00 0
4.50 10
4.00 20
3.50 30
3.00 40
2.50 50
2.00 60
1.50 70
This study source was downloaded by 100000871695925 from CourseHero.com on 10-26-2023 13:02:23 GMT -05:00
https://www.coursehero.com/file/44349872/Topic-11-Monopolistic-Competition-and-Oligopoly-Assignment-4docx/
, Topic 11 Monopolistic Competition and Oligopoly Assignment 2
Examine the four tables below, tables A–D
Table A Table B Table C Table D
Quantity of Quantity of Quantity of Quantity of
Tea Tea Tea Tea
Price Demanded Price Demanded Price Demanded Price Demanded
(dollars) (cups) (dollars) (cups) (dollars) (cups) (dollars) (cups)
$6.00 0 $5.00 5 $4.00 0 $5.50 0
5.70 10 4.70 20 3.50 10 5.00 10
5.40 20 4.40 35 3.00 20 4.50 20
5.10 30 4.10 50 2.50 30 4.00 30
4.80 40 3.80 65 2.00 40 3.50 40
4.50 50 3.50 80 1.50 50 3.00 50
4.20 60 3.20 95 1.00 60 2.50 60
3.90 70 2.90 110 0.50 70 2.00 70
a. Which table best represents what is likely to happen to the demand for Andrei's tea if
other Russian immigrants also open tea rooms in Minneapolis?
Table C
b. Which of the following scenarios is most likely to increase the demand for Andrei’s tea
and make it less elastic?
Andrei’s tea wins the “Best Tea in the Midwest” award in Tea Lover’s Digest.
This study source was downloaded by 100000871695925 from CourseHero.com on 10-26-2023 13:02:23 GMT -05:00
https://www.coursehero.com/file/44349872/Topic-11-Monopolistic-Competition-and-Oligopoly-Assignment-4docx/
