Firms in monopolistic competition and oligopoly depend on some degree of brand

Firms in monopolistic competition and oligopoly depend on some degree of brand
                            loyalty. Which goods are able to command the most brand loyalty?

a.facial tissues

b.cola drinks

c.shampoo

d.cigarettes

e.toothpaste

122.              Suppose Jack Weldon came up with a novel idea of making lamps out of recycled
                            automobile tires. His firm, No-Skid Lamps, works three shifts a day trying to keep up
                            with demand. Attracted by its success, other firms copy the idea and produce similar
                            lamps. As a result, No-Skid Lamps’ demand curve

a.shifts to the right and becomes more inelastic

b.shifts to the right and becomes more elastic

c.shifts to the left and becomes more inelastic

d.shifts to the left and becomes more elastic

e.stays the same

123.              If some coffee drinkers continue to buy Maxwell House coffee even when Folger’s coffee
                            is on sale and cheaper, it may be a result of

a.irrational consumer behavior

b.a high cross elasticity

c.brand loyalty

d.Maxwell House being a monopoly

e.elastic demand

124.              Every time new firms enter a monopolistic competitive market, the firms already in the
                            market find their

a.price rising to make up for lost customers

b.cost curves shifting upward, reflecting increased inefficiency

c.profits increasing because total revenues increase with more firms in the market

d.demand curves becoming more inelastic as only loyal customers remain

e.demand curves shifting inward to the left

125.              Judy’s Gymnastics is one of a number of firms in an area offering children’s gymnastics
                            programs. Judy’s advertises that her program is different from all the others because of
                            the classical music she plays during classes. Judy’s advertising campaign is

a.wasteful since she’s in a perfectly competitive market

b.unnecessary since she already has a monopoly

c.aimed at increasing market share

d.an attempt to make the demand for her classes more elastic

e.an example of misleading advertising

126.              LISA BETH Mustard Company undertakes an advertising campaign and finds that within
                            the industry’s relevant price range, the price elasticity of demand for its own mustard fell
                            from 3.5 to 0.94. As a result, we would expect that LISA BETH

a.would raise its price to increase total revenue

b.would cut its price to increase total revenue

c.would increase output to increase total revenue

d.would increase output to reduce average total cost

e.operates in a perfectly competitive market

127.              In a market where all goods are perfect substitutes for each other,

a.the price elasticity of demand is 1.0 for all goods

b.the market is perfectly competitive

c.only one producer dominates

d.only a few firms can operate

e.brand loyalty is high

128.              In the long run, monopolistic competition

a.results in a monopoly

b.ends up with one firm, that is, competition transforms to monopoly

c.ends up with many firms in the industry

d.has zero barriers to entry

e.has no product differentiation

129.              Perfect competition has all of the following features except

a.large number of firms

b.goods that are perfect substitutes

c.no barriers to entry

d.brand loyalty

e.firm has insignificant market share

130.              If people cannot distinguish between goods A and B, then economists describe the goods
                            as

a.having a zero cross elasticity

b.being perfect substitutes

c.belonging to an oligopolistic industry

d.belonging in different markets

e.having a cross elasticity of one