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ECON 312 – Intermediate Macroeconomics | A+ Graded
Exam Questions, Solutions, Study Guide, and Complete
Material for 2026/2027
good way to describe ____(monopolistic/oligopolistic) competition is that it mixes
a small amount of monopoly power with a large amount of competition,
while_______ (monopoly/oligopoly) blends a large amount of monopoly power, a
small amount of competition through entry, and considerable rivalry among firms.
Blank 1: monopolistic
Blank 2: oligopoly or oligopolistic
Which of the following are typical characteristics of monopolistic competition?
No collusion
Independent action
Small market share
Which of the following produce variations of a particular product?
Monopolistically competitive firms
Entry of new firms into monopolistically competitive industries is relatively easy
because ______.
capital requirements are low
A monopolistic competitor's demand curve is ______.
more elastic than that of a pure monopoly but less elastic than that of a firm in pure
competition
Two types of market models that closely approximate many markets in the
real world are monopolistic competition and oligopoly.
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In the short run, monopolistically competitive firms maximize profits or minimize
losses by producing the output level where marginal revenue equals marginal
cost.
Monopolistic competition normally consists of 25 to 75 firms rather than hundreds
or thousands and involves which of the following characteristics?
independent action
small market shares no
collusion
What will happen to a monopolistically competitive firm in the long run?
It will only break even.
Which of the following correctly describes the difference between products under
pure competition versus products under monopolistic competition?
Standardized products are sold in pure competition, but differentiated products are
sold in monopolistic competition.
In the long run, a monopolistic competitor fails to achieve which of the following?
Allocative efficiency
Productive efficiency
Entry to and exit from monopolistically competitive industries is ______. relatively
easy
When Mary tried to get an appointment with a local dentist she was told that the
earliest the doctor could see her was in three weeks. This may have been due to a
lack of ______. excess capacity
The demand curve faced by a monopolistically competitive firm is _____. highly
but not perfectly elastic.
If a monopolistically competitive firm is producing where its marginal revenue is
less than its marginal cost, then the firm should produce less output to increase
profits or reduce losses.
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Which of the following factors is most likely to help a monopolistically
competitive firm postpone earning only a normal profit?
Product differentiation
In long-run equilibrium, monopolistically competitive firms will show a(n) _____.
normal profit
Which of the following represents the most significant benefits to society
generated by monopolistically competitive markets?
Product differentiation
Productive efficiency in monopolistically competitive markets does not occur in
the long run because firms set the price
on the demand curve where MR=MC to maximize economic profit, making output
less than optimal from society's perspective.
Monopolistically competitive firms to engage in ______ competition by means of
product differentiation and advertising, which makes the market situation complex.
nonprice
Which of the following best exemplifies a firm with excess capacity?
A fast-food restaurant where customers never have to wait to place an order.
Why do firms engage in product differentiation if it adds to the firm's costs?
Increased differentiation may increase demand enough to compensate for the added
costs.
A major trade-off that occurs in monopolistically competitive industries is that,
as product differentiation increases, excess capacity also increases.
In order for a monopolistically competitive firm to maximize profits, it must juggle
which of the following factors?
the selling price of the product
the level of advertising the
variety of product
ECON 312 – Intermediate Macroeconomics | A+ Graded
Exam Questions, Solutions, Study Guide, and Complete
Material for 2026/2027
good way to describe ____(monopolistic/oligopolistic) competition is that it mixes
a small amount of monopoly power with a large amount of competition,
while_______ (monopoly/oligopoly) blends a large amount of monopoly power, a
small amount of competition through entry, and considerable rivalry among firms.
Blank 1: monopolistic
Blank 2: oligopoly or oligopolistic
Which of the following are typical characteristics of monopolistic competition?
No collusion
Independent action
Small market share
Which of the following produce variations of a particular product?
Monopolistically competitive firms
Entry of new firms into monopolistically competitive industries is relatively easy
because ______.
capital requirements are low
A monopolistic competitor's demand curve is ______.
more elastic than that of a pure monopoly but less elastic than that of a firm in pure
competition
Two types of market models that closely approximate many markets in the
real world are monopolistic competition and oligopoly.
,2 | Page
In the short run, monopolistically competitive firms maximize profits or minimize
losses by producing the output level where marginal revenue equals marginal
cost.
Monopolistic competition normally consists of 25 to 75 firms rather than hundreds
or thousands and involves which of the following characteristics?
independent action
small market shares no
collusion
What will happen to a monopolistically competitive firm in the long run?
It will only break even.
Which of the following correctly describes the difference between products under
pure competition versus products under monopolistic competition?
Standardized products are sold in pure competition, but differentiated products are
sold in monopolistic competition.
In the long run, a monopolistic competitor fails to achieve which of the following?
Allocative efficiency
Productive efficiency
Entry to and exit from monopolistically competitive industries is ______. relatively
easy
When Mary tried to get an appointment with a local dentist she was told that the
earliest the doctor could see her was in three weeks. This may have been due to a
lack of ______. excess capacity
The demand curve faced by a monopolistically competitive firm is _____. highly
but not perfectly elastic.
If a monopolistically competitive firm is producing where its marginal revenue is
less than its marginal cost, then the firm should produce less output to increase
profits or reduce losses.
, 3 | Page
Which of the following factors is most likely to help a monopolistically
competitive firm postpone earning only a normal profit?
Product differentiation
In long-run equilibrium, monopolistically competitive firms will show a(n) _____.
normal profit
Which of the following represents the most significant benefits to society
generated by monopolistically competitive markets?
Product differentiation
Productive efficiency in monopolistically competitive markets does not occur in
the long run because firms set the price
on the demand curve where MR=MC to maximize economic profit, making output
less than optimal from society's perspective.
Monopolistically competitive firms to engage in ______ competition by means of
product differentiation and advertising, which makes the market situation complex.
nonprice
Which of the following best exemplifies a firm with excess capacity?
A fast-food restaurant where customers never have to wait to place an order.
Why do firms engage in product differentiation if it adds to the firm's costs?
Increased differentiation may increase demand enough to compensate for the added
costs.
A major trade-off that occurs in monopolistically competitive industries is that,
as product differentiation increases, excess capacity also increases.
In order for a monopolistically competitive firm to maximize profits, it must juggle
which of the following factors?
the selling price of the product
the level of advertising the
variety of product
