In monopolistic competition in the long run, firms ______________________.
incur an economic loss and require more capacity
make an economic profit and have excess capacity
make a normal profit and have excess capacity
make a normal profit and require more capacity
Advertising costs are _______ costs and the per unit cost _______ as production increases.
variable; does not change
In the kinked demand curve model of oligopoly, demand for the good is _______ elastic at prices below the current price because if one firm lowers the price, other firms will _______ their prices.
In a dominant firm oligopoly, the dominant firm __________ and produces the output at which _________ equals _________. The smaller firms in the market are _______.
acts like a monopoly; marginal revenue; marginal cost; price takers
acts like a monopoly; revenue; opportunity cost; price takers
is competitive; marginal revenue; marginal cost; monopolistic
acts like a monopoly; total revenue; total cost; price takers
John von Neumann and Oskar Morgenstern are the inventors of ___________________.
the Nash equilibrium
When producers agree to produce less so that they can raise prices and make larger profits, the agreement is called ________________.
a collusive agreement
a monopoly agreement
a pricing agreement
an oligopoly agreement
_______ is a group of firms that have made a collusive agreement.
In a repeated game, punishments that result in heavy damages are an incentive for players to adopt the strategies that result in a _______ equilibrium.
A firm in a contestable market __________________.
makes an economic profit
makes an economic revenue
makes a normal profit
incurs an economic loss
Limit pricing _______ the market by convincing them that they will ___________________ in the industry.
deters potential firms from entering; incur an economic loss
encourages potential firms to enter; make a normal profit
encourages potential firms to enter; make an economic profit
deters potential firms from entering; make only normal profit
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