Liberty University ECON 213 quiz 11 solutions answers right

Liberty University ECON 213 quiz 11 solutions answers right

How many versions: 10 different versions

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Question 1 Market power is best described as when the firm’s demand curve is:

Question 2 In a monopolistically competitive industry, price:

Question 3 Why would perfectly competitive industries advertise even though individual firms do not?

Question 4 Which of the following is a characteristic of a monopolistically competitive firm?

Question 5 Advertising is designed to:

Question 6 Both perfectly competitive and monopolistically competitive industries have many firms, in fact so many that, in the long run:

Question 7 Profit­maximizing, monopolistically competitive firms:

Question 8 Which of the following is the best description of monopolistic competition?

Question 9 The theory of monopolistic competition predicts that, in long­run equilibrium, a monopolistically competitive firm will:

Question 10 The correct level of output for a profit­maximizing, monopolistically competitive firm always matches the point where:

Question 11 Which of the following is the best example of a firm operating in a monopolistically competitive market?

Question 12 As new firms enter a monopolistically competitive industry, it can be expected that:

Question 13 If barriers to entry are high and products are somewhat differentiated:

Question 14 Refer to the following graph to answer the questions that follow.

In the long run, the demand curve for the monopolistically competitive firm would:

Question 15 The shape and/or slope of the marginal revenue curve under monopolistic competition is:

Question 16 A convenience store is generally able to charge and obtain a higher price for its candy bars than is Wal­Mart because the convenience store:

Question 17 We can represent the entry of new firms into a monopolistically competitive market by shifting the existing firms’:

Question 18 An increase in marginal cost causes a profit­maximizing, monopolistically competitive firm to:

Question 19 Which of the following is evidence of market power?

Question 20 If all monopolistically competitive firms had identical cost curves:

Question 1 Because of successful advertising:

Question 2 Firms in a monopolistically competitive market structure maximize their profit by producing an output where:

Question 3 The marginal revenue of a monopolistically competitive firm will always be:

Question 4 Monopolistic competition is like monopoly in that:

Question 5 If monopolistically competitive firms are incurring losses, existing firms would:

Question 6 One critical characteristic of monopolistic competition is:

Question 7 Sarah’s Ice Cream distinguishes itself from other firms through great service by attractive servers. Sarah’s Ice Cream faces competition from firms that produce similar but not identical products. Based on the this information Sarah’s Ice Cream:

Question 8 Markup would not exist in:

Question 9 In the long run, surviving firms in monopolistic competition earn:

Question 10 The demand curve for a monopolistically competitive firm is downward sloping because of:

Question 11 Market power is best described as when the firm’s demand curve is:

Question 12 You shop at the local drugstore because it is convenient. This situation is best described as:

Question 13 In the long run, in monopolistic competition:

Question 14 If the price that determined where marginal revenue equaled marginal cost were below the bottom of the average variable cost curve, then the profit­maximizing, monopolistically competitive firm would:

Question 15 In the long run, the positive economic profits of Wings and Things, a monopolistic competitor, are:

Question 16 A monopolistically competitive firm usually charges less than a monopoly firm because:

Question 17 There is a discussion of Kevin Trudeau in your textbook. Which answer below best describes him?

Question 18 Caskets are produced in a monopolistic competitive market. One producer, Final Boxes, sells 20 caskets a week at a price of $550 each. Its average total cost is $600. From this information, we know that:

Question 19 The greeting card industry is:

Question 20 Refer to the accompanying graph. Profit­maximizing output for the monopolistically competitive firm is:

Question 1

Refer to the accompanying graph. The shortrun Profitmaximizing output for the monopolistic competitive firm is:

Question 2

A monopolistically competitive firm usually charges less than a monopoly firm because:

Question 3

One could argue correctly that:

Question 4

Refer to the accompanying graph. If all firms in a monopolistically competitive industry have demand and cost curves like those shown, we would expect that, in the long run

Question 5

Which of the following is a characteristic of a monopolistically competitive firm?

Question 6

One drawback to advertising might be that it could easily:

Question 7

At one time, Heinz made its own brand of soups. The company also produced those same soups to be sold as store brands. The Heinz soups and storebrand soups were differentiated only by their label. If Harris Pilton bought Heinz soup because she said, “Everyone knows the storebrand soup is nasty,” this indicates:

Question 8

Firms in a monopolistically competitive industry produce:

Question 9

Successful advertising:

Question 10

A monopolistically competitive market is characterized by:

Question 11

Monopolistically competitive firms that are earning zero economic profit would most likely:

Question 12

If monopolistically competitive firms are making zero economic profit, then these firms would:

Question 13

A generic product would be best described as one that is:

Question 14

The fastfood, bottled water, and cereal markets are all examples of:

Question 15

Refer to the accompanying graph. If all firms in the industry are the same as the monopolistically competitive firm shown, the long run will reflect:

Question 16

The demand curve for a monopolistically competitive firm is downward sloping because of:

Question 17

Caskets are produced in a monopolistic competitive market. One producer, Final Boxes, sells 20 caskets a week at a price of $550 each. Its average total cost is $600. From this information, we know that:

Question 18

A monopolistically competitive firm usually charges more than a perfectly competitive firm because:

Question 19

Both competitive and monopolistically competitive firms:

Question 20

Successful advertising would be most effective in the __________ industry.

Question 1 Perfect competition and monopolistic competition are similar because, under both market structures:

Question 2 If all monopolistically competitive firms had identical cost curves:

Question 3 You shop at the local drugstore because it is convenient. This situation is best described as:

Question 4 Which of the following is the best example of a firm operating in a monopolistically competitive market?

Question 5 Refer to the accompanying graph. Profit­maximizing output for the monopolistically competitive firm is:

Question 6 Profit­maximizing, monopolistically competitive firms:

Question 7 Fast­food restaurants are a good illustration of:

Question 8 Refer to the following graph to answer the questions that follow. In the long run, which of the following is true for the profit­maximizing firm?

Question 9 If the marginal revenue curve lies above the demand curve for a firm:

Question 10 The correct level of output for a profit­maximizing, monopolistically competitive firm always matches the point where:

Question 11 If we are to discuss why the term “monopolistic competition” is used, the best description would be that the industry is “monopolistic” because it:

Question 12 One thing that makes monopolistic competition similar to perfect competition is that, in the:

Question 13 Refer to the following graph to answer the questions that follow. The maximum long­run economic profit earned by this monopolistic competitive firm is:

Question 14 Sarah’s Ice Cream distinguishes itself from other firms through great service by attractive servers. Sarah’s Ice Cream faces competition from firms that produce similar but not identical products. Based on the this information Sarah’s Ice Cream:

Question 15 The shape and/or slope of the marginal revenue curve under monopolistic competition is:

Question 16 Markup would generally be highest under:

Question 17 In a monopolistically competitive industry, price:

Question 18 The best description of industries below is that:

Question 19 Caskets are produced in a monopolistic competitive market. One producer, Final Boxes, sells 20 caskets a week at a price of $550 each. Its average total cost is $600. From this information, we know that:

Question 20 The demand curve for a monopolistically competitive firm is downward sloping because of:

Question 1 Why would perfectly competitive industries advertise even though individual firms do not?

Question 2 We could state correctly that the minimum characteristic necessary to distinguish among price­making firms is:

Question 3 Which of the following is true in long­run equilibrium for both a competitive market and monopolistic competition?

Question 4 In the long run, monopolistically competitive firms like Hardee’s and Carl’s Jr. operate at a price that:

Question 5 Which of the following is the best example of a firm operating in a monopolistically competitive market?

Question 6 Markup would generally be highest under:

Question 7 In the long run, the positive economic profits of Wings and Things, a monopolistic competitor, are:

Question 8 A franchise might be worth $1 million or more because:

Question 9 The fast­food, bottled water, and cereal markets are all examples of:

Question 10 An increase in marginal cost causes a profit­maximizing, monopolistically competitive firm to:

Question 11 Refer to the accompanying graph. To maximize profit, the monopolistically competitive firm shown will charge a price per unit of:

Question 12 Sart Bimpson, an economics student, believes that a beer sold by one particular shack on the beach is completely different from an identical beer produced by the same factory and sold by the luxury hotel adjacent to the shack. The response that would best describe Sart’s belief is:

Question 13 Which of the following is evidence of market power?

Question 14 Both perfectly competitive and monopolistically competitive industries have many firms, in fact so many that, in the long run:

Question 15 If the marginal revenue curve lies above the demand curve for a firm:

Question 16 Which of the following is always associated with monopolistic competition?

Question 17 You shop at the local drugstore because it is convenient. This situation is best described as:

Question 18 A generic product would be best described as one that is:

Question 19 Which of the following statements best describes firms under monopolistic competition?

Question 20 The short­run equilibrium for a monopolistically competitive firm is at price = $29, average total cost = $22, and marginal cost = marginal revenue = $18. Which of the following is true?

Question 1 A monopolistically competitive firm usually charges more than a perfectly competitive firm because:

Question 2 If barriers to entry are high and products are somewhat differentiated:

Question 3 Excess capacity best describes the fact that:

Question 4 Monopolistically competitive firms:

Question 5 Which of the following market structures describes an industry in which all firms produce differentiated output and there are few barriers to entry?

Question 6 Refer to the accompanying graph. The maximum long­run economic profit earned by this monopolistically competitive firm is:

Question 7 If positive economic profit exists in monopolistic competition, there is:

Question 8 The theory of monopolistic competition predicts that, in long­run equilibrium, a monopolistically competitive firm will:

Question 9 The shape and/or slope of the marginal revenue curve under monopolistic competition is:

Question 10 Perfect competition and monopolistic competition are similar because, under both market structures:

Question 11 The greeting card industry is:

Question 12 The best description of industries below is that:

Question 13 Product differentiation makes the demand for a monopolistically competitive firm’s product:

Question 14 Profit­maximizing, monopolistically competitive firms:

Question 15 If a monopoly firm suddenly lost its barriers to entry and faced new competition, yet consumers thought that the former monopoly’s products were somewhat different than its new competitors, then:

Question 16 A generic product would be best described as one that is:

Question 17 Profit­maximizing, monopolistically competitive firms:

Question 18 Refer to the accompanying graph. If all firms in the industry are the same as the monopolistically competitive firm shown, the long run will reflect:

Question 19 You shop at the local drugstore because it is convenient. This situation is best described as:

Question 20 A competitive firm would have:

One could argue correctly that

A convenience store is generally able to charge and obtain a higher price for its candy bars than is Wal-Mart because the convenience store

Refer to the accompanying graph. The maximum short-run economic profit earned by this monopolistic competitive firm is

Which of the following is true in long-run equilibrium for both a competitive market and monopolistic competition

A monopolistically competitive firm usually charges more than a perfectly competitive firm because

At one time, Heinz made its own brand of soups. The company also produced those same soups to be sold as store brands. The Heinz soups and storebrand soups were differentiated only by their label. If Harris Pilton bought Heinz soup because she said, “Everyone knows the store-brand soup is nasty,” this indicates

Which of the following is the best description of monopolistic competition

Monopolistic competition

Markup would generally be lowest under

Which of the following is the best example of a monopolistic competitor

Which of the following market structures describes an industry in which all firms produce differentiated output and there are few barriers to entry

If a monopolistically competitive firm wants to maximize profits, it will increase production until

In the long run, in monopolistic competition

Excess capacity best describes the fact that

The movie You’ve Got Mail features a successful small bookstore competing with a new book superstore around the block. The big superstore offers deep discounts, while the small independent bookstore has better service and more knowledgeable staff. The movie best illustrates which of the following

If we are to discuss why the term “monopolistic competition” is used, the best description would be that the industry is “monopolistic” because it

Which of the following is the best example of a monopolistically competitive market

Which of the following is the best example of a firm operating in a monopolistically competitive market

Monopolistic competition means

The difference between price and marginal cost is

     1.   Monopolistic competition means:

a.	firms are in a monopoly but they compete.
b.	firms are in perfect competition but they collude similar to monopolies.
c.	firms differentiate their output, which makes them price-makers, but barriers to entry are low or non-existent.
d.	oligopoly firms collude until they become monopolies.
e.	firms have downward-sloping demand.

     2.   If we are to discuss why the term “monopolistic competition” is used, the best description would be that the industry is “monopolistic” because it:

a.	has high barriers to entry but is “competitive” because it has many firms.
b.	has low barriers to entry but is “competitive” because it has few firms.
c.	has product differentiation but is “competitive” because it has many firms.
d.	has a monopoly but is “competitive” because there are low barriers to entry, meaning it has potential rivals.
e.	holds patents but is “competitive” because other firms might invent similar patentable products.

     3.   Which of the following industry structures is best associated with low barriers to entry?

a.	monopoly
b.	a cartel
c.	oligopoly
d.	monopolistic competition
e.	a collusive industry

     4.   One critical characteristic of monopolistic competition is:

a.	one firm dominates the industry.
b.	a few firms collude with each other by agreeing on price.
c.	a few firms compete without agreeing on price.
d.	there are many small firms in the industry.
e.	there is one large firm in the industry but it has no control over the price.

     5.   A monopolistically competitive market is characterized by:

a.	many small sellers selling a differentiated product.
b.	a single seller of a unique product that has few or no substitutes.
c.	very high barriers to entry.
d.	many small sellers selling an identical product.
e.	a few firms producing either differentiated or identical products.

     6.   Which of the following is the best description of monopolistic competition?

a.	easy entry, low markup
b.	barriers to entry, high markup
c.	horizontal demand curve for the firm
d.	firm has no control over price
e.	barriers to entry, low markup

     7.   Which of the following most closely approximates the conditions of monopolistic competition?

a.	The market for Grade A sorghum (milo), which is characterized by many firms producing a homogeneous product
b.	The restaurant industry, which is characterized by many firms producing differentiated products in an industry with free entry and exit
c.	A cable television service, where a licensed supplier competes with firms offering satellite service
d.	The market for jumbo aircraft, where one major domestic firm competes with one major foreign firm
e.	The tobacco market, which is characterized by a few firms producing a differentiated product with difficult entry

     8.   Which of the following is the best example of a monopolistically competitive market?

a.	corn
b.	automobiles
c.	electric utilities
d.	retail clothing stores
e.	wheat

     9.   Which of the following is the best example of a firm operating in a monopolistically competitive market?

a.	a Nebraska corn farmer
b.	Applebee’s, a casual dining restaurant
c.	the U.S. Postal Service
d.	Ford, an automotive manufacturer
e.	electric companies prior to deregulation

   10.   Firms in a monopolistically competitive industry produce:

a.	homogeneous goods and services.
b.	differentiated products.
c.	monopolistic goods only.
d.	only industrial products—and no consumer products.
e.	only consumer products—and no industrial products.

   11.   Which of the following is the best example of a monopolistic competitor?

a.	corn farmers
b.	diet centers
c.	the U.S. Postal Service
d.	Ford Motor Company
e.	localized cement companies

   12.   If all monopolistically competitive firms had identical cost curves:

a.	the industry would remain monopolistically competitive because of product differentiation.
b.	long-run profit for each firm would be positive.
c.	short-run profit for each firm would be negative.
d.	excessive brand proliferation would result.
e.	the industry would become perfectly competitive.

   13.   We could state correctly that the minimum characteristic necessary to distinguish among price-making firms is:

a.	product differentiation.
b.	price discrimination.
c.	the level of the concentration ratio.
d.	the number of firms in the industry.
e.	whether they produce industrial or consumer products.

   14.   If a monopoly firm suddenly lost its barriers to entry and faced new competition, yet consumers thought that the former monopoly’s products were somewhat different than its new competitors, then:

a.	the industry has probably become perfectly competitive.
b.	long-run profit for this firm will likely exist.
c.	the industry has probably become a monopolistically competitive industry.
d.	the industry is probably cooperating to maximize joint profits.
e.	the industry has probably become a monopoly.

   15.   Which of the following statements best describes firms under monopolistic competition?

a.	There is little price or quality competition.
b.	The firms compete using quality, location, and style.
c.	Firms do not compete using advertising.
d.	There is little competition between firms.
e.	There are a few firms that collude to set the highest price.

   16.   Product differentiation:

a.	refers to firms’ attempts to make their products look the same as other products in the industry.
b.	refers to firms’ attempts to make real or apparent differences in essentially substitutable products look different in the minds of consumers.
c.	refers to the advantage big firms have in research and development.
d.	is a common characteristic of a perfectly competitive market structure.
e.	is employed only in a monopoly market structure.

   17.   Which of the following is always associated with monopolistic competition?

a.	identical products
b.	economic profits in the short run
c.	demand curve that lies below the marginal revenue curve
d.	demand curves that become more inelastic as new entry occurs
e.	product differentiation

   18.   The movie You’ve Got Mail features a successful small bookstore competing with a new book superstore around the block. The big superstore offers deep discounts, while the small independent bookstore has better service and more knowledgeable staff. The movie best illustrates which of the following?

a.	For monopolistically competitive firms, profits will be positive in the long run.
b.	Homogeneous products are produced by both firms because consumers perceive books from either store as the same.
c.	Product differentiation occurs because consumers perceive the bookstores as different.
d.	Monopoly production occurs because the movie is copyrighted.
e.	Perfect competition occurs because many movie theaters are showing identical movies.

   19.   The movie You’ve Got Mail features a successful small bookstore competing with a new book superstore around the block. The big superstore offers deep discounts, while the small independent bookstore has better service and more knowledgeable staff. The movie best illustrates which of the following?

a.	Small producers can’t compete based on costs.
b.	Large producers offer differentiated products and compete most effectively through product differentiation.
c.	Small producers offer differentiated products and compete most effectively through product differentiation.
d.	The Meg Ryan character’s bookstore best illustrates a perfectly competitive firm.
e.	The Tom Hanks character’s bookstore best illustrates a monopoly firm.

   20.   Shopping at the clothing store Abercrombie & Fitch instead of Ann Taylor best illustrates which of the following?

a.	differentiation by style or type
b.	differentiation by location
c.	differentiation by quality
d.	homogeneous products
e.	high barriers to entry

   21.   You shop at the local drugstore because it is convenient. This situation is best described as:

a.	differentiation by style or type.
b.	differentiation by a cartel.
c.	monopolistic competition with differentiation by location.
d.	a market with horizontal demand.
e.	perfect competition because there are so many drugstores in the area.

   22.   A convenience store is generally able to charge and obtain a higher price for its candy bars than is Wal-Mart because the convenience store:

a.	differentiates based on style.
b.	differentiates based on location.
c.	differentiates based on quality.
d.	advertises that its candy bars are identical to those sold at Wal-Mart.
e.	differentiates based on high barriers to entry, such as patents.

   23.   At one time, Heinz made its own brand of soups. The company also produced those same soups to be sold as store brands. The Heinz soups and storebrand soups were differentiated only by their label. If Harris Pilton bought Heinz soup because she said, “Everyone knows the store-brand soup is nasty,” this indicates:

a.	consumer cooperation.
b.	product homogeneity.
c.	product differentiation.
d.	a cartel exists.
e.	monopolization by Heinz.

   24.   Which of the following best describes DiGiorno’s incentive for quality control versus that of the generic brands of pizza?

a.	Their incentives are identical.
b.	Generic brands have more incentive for high quality and high-quality control.
c.	DiGiorno has more incentive for high quality and high-quality control.
d.	Generic brands purposefully have lower quality because they charge a lower price and need to maintain consumer perception that they should expect lower quality at the lower price.
e.	DiGiorno tries to match the same quality as the generic brands.

   25.   Sarah’s Ice Cream distinguishes itself from other firms through great service by attractive servers. Sarah’s Ice Cream faces competition from firms that produce similar but not identical products. Based on the this information Sarah’s Ice Cream:

a.	is probably in a perfectly competitive industry.
b.	probably has a horizontal demand curve.
c.	is probably in a monopolistically competitive industry.
d.	is probably in an oligopoly industry.
e.	has a monopoly.

   26.   Monopolistic competition:

a.	is the same as monopoly.
b.	is more similar to perfect competition than to monopoly.
c.	is just like monopoly but with more market power.
d.	is a combination of oligopoly and monopoly.
e.	cannot legally exist in the United States because of antitrust laws.

   27.   If barriers to entry are high and products are somewhat differentiated:

a.	the industry is probably perfectly competitive.
b.	the industry is probably monopolistically competitive.
c.	the industry is probably a differentiated monopsony.
d.	economic profit might be sustainable.
e.	the situation cannot exist.

   28.   Which of the following market structures describes an industry in which all firms produce differentiated output and there are few barriers to entry?

a.	perfect competition
b.	monopoly
c.	oligopoly
d.	a cartel
e.	monopolistic competition

   29.   The best description of industries below is that:

a.	a monopolistically competitive industry is more competitive than any other industry form.
b.	monopolies are more competitive than monopolistically competitive firms.
c.	monopolistically competitive firms are located between monopoly and perfect competition.
d.	all firms can make a long-run economic profit, but only perfect competitors can make a shortrun profit.
e.	all firms engage in short-run loss minimization by selecting the point where marginal revenue = price.

   30.   If a firm has substantial market power, it must be operating in an industry that would be classified as:

a.	a monopoly.
b.	perfectly competitive.
c.	monopolistically competitive.
d.	perfectly competitive or monopolistically competitive.
e.	perfectly competitive or monopolistic.

   31.   If the marginal revenue curve lies above the demand curve for a firm:

a.	this is not a firm that exists in any traditional industries.
b.	both curves are upward-sloping.
c.	both curves are parallel.
d.	this must be a monopolistically competitive firm.
e.	both curves are downward-sloping.

   32.   A monopolistically competitive firm usually charges less than a monopoly firm because:

a.	it is part of a group of firms that has formally agreed to control the price and the output of a product.
b.	its primary goal is to reap monopoly profits by replacing competition with cooperation.
c.	producing homogenous output is more expensive than producing differentiated output.
d.	it faces some degree of competition due to low barriers to entry.
e.	it has a monopoly, but potential entrants exist in the form of contestable markets.

   33.   Monopolistic competition is like monopoly in that:

a.	price changes are dictated by changes in supply.
b.	both industries represent price-taking firms.
c.	both industries represent price-making firms.
d.	both industries have high barriers to entry.
e.	neither industry has high barriers to entry.

   34.   The shape and/or slope of the marginal revenue curve under monopolistic competition is:

a.	U-shaped.
b.	horizontal.
c.	vertical.
d.	upward-sloping.
e.	downward-sloping and twice as steep as the demand curve.

   35.   Which of the following statements best describes the price, output, and profit conditions of monopolistic competition?

a.	Price will equal marginal cost at the profit-maximizing level of output, and profits will be positive in the long run.
b.	Price will always equal average variable cost in the short run, and either profits or losses may result in the long run.
c.	Marginal revenue will equal marginal cost in the short run at a profit-maximizing level of output; in the long run, economic profit will be zero.
d.	Marginal revenue will equal average total cost in the short run, and long-run economic profits are generally positive but could be zero.
e.	Output is equal to the amount for which marginal revenue equals price.

   36.   The descriptor “monopolistic” in the term “monopolistic competition” best describes:

a.	high barriers to entry.
b.	product differentiation resulting in a downward-sloping demand curve for the firm’s product.
c.	production of a unique product.
d.	a single producer.
e.	a few small firms.

   37.   Refer to the accompanying graph. The short-run profit-maximizing output for the monopolistic competitive firm is:

a.	0 (zero) units per day.
b.	200 units per day.
c.	400 units per day.
d.	600 units per day.
e.	800 units per day.

   38.   Refer to the accompanying graph. The short-run profit-maximizing output for the monopolistic competitive firm is:

a.	0 (zero) units per week.
b.	50 units per week.
c.	60 units per week.
d.	85 units per week.
e.	90 units per week.

   39.   Refer to the accompanying graph. The maximum short-run economic profit earned by this monopolistic competitive firm is:

a.	$20
b.	$66
c.	$272.
d.	none; this firm must shut down or lose all of its fixed cost.
e.	inconclusive; the maximum short-run profit can’t be determined from the information given.

   40.   The short-run equilibrium for a monopolistically competitive firm is at price = $29, average total cost = $22, and marginal cost = marginal revenue = $18. Which of the following is true?

a.	Per-unit profit is $11.
b.	More firms will be attracted into the industry.
c.	The firm could increase the price and increase profits.
d.	The firm could decrease the price and increase profits.
e.	The firm is operating in the upward-sloping portion of average total cost (ATC).

   41.   Which of the following is true in long-run equilibrium for both a competitive market and monopolistic competition?

a.	Accounting profit is zero.
b.	Price equals marginal revenue.
c.	Long-run average cost is minimized.
d.	Economic profit is zero.
e.	Productive efficiency is achieved.

   42.   In the long run, both monopolistic competition and competitive markets result in:

a.	a wide variety of brand-name choices for consumers.
b.	an inefficient allocation of resources.
c.	zero economic profit for firms.
d.	excess capacity.
e.	insufficient capacity.

   43.   In the long run, surviving firms in monopolistic competition earn:

a.	higher than normal economic profit.
b.	zero economic profit.
c.	less than normal profits.
d.	significant economic losses.
e.	praise from the government for achieving allocative efficiency.

   44.   If monopolistically competitive firms are incurring losses, existing firms would:

a.	reduce their costs.
b.	charge higher prices.
c.	make demand more inelastic.
d.	leave the industry.
e.	begin to collude illegally.

   45.   If monopolistically competitive firms are making zero economic profit, then these firms would:

a.	leave the industry.
b.	charge higher prices.
c.	make demand more inelastic.
d.	remain in the industry.
e.	begin to collude illegally.

   46.   Monopolistically competitive firms that are earning zero economic profit would most likely:

a.	reduce their costs.
b.	charge higher prices.
c.	make demand more inelastic.
d.	leave the industry.
e.	remain in the industry.

   47.   In the long run, in monopolistic competition:

a.	the demand curve is tangent to the marginal cost curve.
b.	price = marginal cost.
c.	price = minimum average total cost.
d.	firms have an incentive to leave.
e.	economic profits are zero.

   48.   Monopolistically competitive firms:

a.	eventually become perfectly competitive.
b.	follow the price leader.
c.	earn long-run economic profits.
d.	necessarily earn short-run economic profits.
e.	“compete away” economic profit to zero.

Refer to the following graph to answer the questions that follow.

   49.   The maximum long-run economic profit earned by this monopolistic competitive firm is:

a.	0 (zero).
b.	$600 per day.
c.	$1,200 per day.
d.	$1,800 per day.
e.	$20 per hour.

   50.   In the long run, the demand curve for the monopolistically competitive firm would:

a.	shift leftward.
b.	remain the same, causing the entry of new firms to be impossible.
c.	shift rightward.
d.	move closer to the marginal revenue curve, but the marginal revenue curve would be held constant.
e.	shift rightward, causing the entry of new firms into the industry.

   51.   In the long run, which of the following is true for the profit-maximizing firm?

a.	The firm’s demand curve shifts leftward.
b.	The firm’s average total cost curve shifts upward.
c.	Profit is $1,200 per day.
d.	Profit is $1,500 per day.
e.	The firm’s average total cost curve shifts downward, while the marginal cost curve shifts upward.

   52.   In the long run, the positive economic profits of Wings and Things, a monopolistic competitor, are:

a.	not driven out because competition is not perfect.
b.	not driven out because the demand curve slopes downward.
c.	eliminated due to the entry of firms into the industry.
d.	eliminated due to the departure of firms from the industry.
e.	not driven out because firms cannot enter the industry.

   53.   Refer to the accompanying graph. The maximum long-run economic profit earned by this monopolistically competitive firm is:

a.	0 (zero).
b.	represented by the rectangle abcd.
c.	represented by the rectangle enclosed by the points 50, 0, c, and d.
d.	represented by the area below the demand curve and above marginal cost.
e.	greater than 0 but can’t be shown in the diagram because it is an indefinable area.

   54.   Refer to the accompanying graph. If there are exactly 20 firms in the monopolistically competitive industry that are identical to the firm shown, we would expect that, in the long run:

a.	total industry economic profit would be exactly equal to 20 times the profit of each individual firm.
b.	total industry economic profit would be greater than 20 times the profit of each individual firm.
c.	industry costs would rise.
d.	new firms would desire to enter the industry but would not be able to due to high entry barriers.
e.	total industry economic profit would be zero.

   55.   The theory of monopolistic competition predicts that, in long-run equilibrium, a monopolistically competitive firm will:

a.	produce the output level at which price equals long-run average cost.
b.	produce the output at which short-run average total cost equals marginal cost.
c.	produce the output level at which price equals long-run marginal cost.
d.	operate at minimum long-run average cost.
e.	operate where price equals long-run average fixed cost.

   56.   Which of the following is a characteristic of a monopolistically competitive firm?

a.	The firm faces a downward-sloping demand curve and a marginal revenue curve that is twice as steep.
b.	The firm faces a vertical demand curve and identical marginal revenue curve.
c.	The firm produces a product that is undifferentiated by style, location, or quality.
d.	The firm faces an upward-sloping demand curve.
e.	The firm faces a downward-sloping demand and a horizontal marginal revenue curve.

   57.   Profit-maximizing, monopolistically competitive firms:

a.	are guaranteed an economic profit in the short run.
b.	never lose money.
c.	produce only those goods for which they can acquire a barrier to entry, such as a patent (hence the term “monopolistically”).
d.	necessarily earn long-run economic profits.
e.	cannot be guaranteed an economic profit in any period and might incur losses.

   58.   The fast-food, bottled water, and cereal markets are all examples of:

a.	perfectly competitive markets.
b.	monopolies.
c.	monopolistically competitive markets.
d.	oligopolies.
e.	homogeneously competitive markets.

   59.   If a monopolistically competitive firm is incurring losses, then at the profit-maximizing output amount:

a.	price is above the average total cost curve.
b.	price is below the average total cost curve.
c.	price is equal to marginal revenue.
d.	price is less than marginal revenue.
e.	average total costs equals marginal cost.

   60.   Fast-food restaurants are a good illustration of:

a.	oligopolistic competition.
b.	perfect competition.
c.	monopoly.
d.	monopolistic competition.
e.	oligopoly.

   61.   Caskets are produced in a monopolistic competitive market. One producer, Final Boxes, sells 20 caskets a week at a price of $550 each. Its average total cost is $600. From this information, we know that:

a.	new casket firms will want to enter.
b.	this producer is losing $1,000 a week.
c.	this producer is making an economic profit of $500.
d.	this producer is setting marginal revenue = marginal cost.
e.	this producer should increase production.

   62.   The greeting card industry is:

a.	most likely a competitive market and has low markups.
b.	most likely a monopoly and has high markups.
c.	most likely monopolistically competitive and has low markups.
d.	most likely an oligopoly with low markups.
e.	characterized by firms that advertise and are mutually interdependent.

   63.   Refer to the accompanying graph. Profit-maximizing output for the monopolistically competitive firm is:

a.	0 (zero) units.
b.	20 units.
c.	25 units.
d.	30 units.
e.	35 units.

   64.   Both competitive and monopolistically competitive firms:

a.	can maximize profit by raising price.
b.	cannot control or set their own price.
c.	can maximize profit by producing to the point where marginal cost = marginal revenue.
d.	can enforce price arrangements vigorously in court.
e.	sell products that are identical.

   65.   The marginal revenue of a monopolistically competitive firm will always be:

a.	less than the price.
b.	more than the price.
c.	the same as the price.
d.	identical to the marginal cost curve.
e.	identical to the average total cost curve.

   66.   Firms in a monopolistically competitive market structure maximize their profit by producing an output where:

a.	price equals average total cost.
b.	marginal cost equals average variable cost.
c.	average revenue equals marginal revenue.
d.	marginal revenue equals marginal cost.
e.	total revenue equals total cost.

   67.   The correct level of output for a profit-maximizing, monopolistically competitive firm always matches the point where:

a.	total revenue equals total cost.
b.	marginal revenue equals marginal cost.
c.	price equals average total cost.
d.	price equals marginal cost.
e.	average revenue equals marginal revenue.

   68.   Which of the following best describes the relationship between price and marginal revenue for monopolistic competitors?

a.	They are always equal.
b.	They are equal only when there are relatively few firms in the industry.
c.	Price is below marginal revenue, as a general rule, regardless of the number of firms in the monopolistically competitive industry.
d.	Price is above marginal revenue, as a general rule, regardless of the number of firms in the monopolistically competitive industry.
e.	At low levels of output, price is above marginal revenue. At high levels of output, price is below marginal revenue as long as the number of firms is not too many because, if it is too large, the monopolistically competitive industry will become perfectly competitive.

   69.   Costume jewelry is produced in a monopolistically competitive market. A profit-maximizing producer finds that marginal revenue = marginal cost = $4.50 when output is 700 rings. An economist studying this information can conclude that:

a.	the producer is charging a price of $4.50.
b.	economic profit is $3,150.
c.	the producer charges a price greater than $4.50.
d.	new firms will want to enter.
e.	this producer should produce more than 700 rings.

   70.   Refer to the accompanying graph. To maximize profit, the monopolistically competitive firm shown will charge a price per unit of:

a.	0 (zero).
b.	$20.17.
c.	$18.17.
d.	$16.87
e.	$15.87

   71.   Which of the following is true for a profit-maximizing firm operating in a competitive market, monopolistic competition, and monopoly?

a.	Firms earn positive economic profits in the long run.
b.	Firms earn zero economic profits in the long run.
c.	Profits are maximized when marginal cost equals marginal revenue.
d.	Price equals marginal revenue.
e.	Entry into the industry is impossible.

   72.   If the price that determined where marginal revenue equaled marginal cost were below the bottom of the average variable cost curve, then the profit-maximizing, monopolistically competitive firm would:

a.	produce an output amount where marginal cost = marginal revenue and make a small profit.
b.	produce an output amount that corresponded to the place where marginal cost = marginal revenue and break even.
c.	produce an output amount that corresponded to the place where marginal cost = marginal revenue but make a small loss.
d.	shut down because it would cost more to produce and sell output than it would to shut down and lose all fixed costs.
e.	produce an output amount that corresponded to the place where average total cost = average variable cost and incur a small loss.

   73.   An increase in marginal cost causes a profit-maximizing, monopolistically competitive firm to:

a.	keep price and output the same.
b.	raise price and decrease output.
c.	lower price and increase output.
d.	raise price and raise output.
e.	lower price and lower output.

   74.   Profit-maximizing, monopolistically competitive firms:

a.	consider the actions of their competitors when determining price.
b.	do not consider the actions of their competitors when determining price.
c.	consider only marginal cost and marginal revenue, which determine the level of output—and the level of output determines price.
d.	consider only average total cost and average variable cost, which determine the level of output—and the level of output determines price.
e.	take their price from the industry price, as do perfectly competitive firms.

   75.   If positive economic profit exists in monopolistic competition, there is:

a.	incentive for new firms to enter.
b.	a motive for existing firms to increase prices.
c.	proof that advertising works.
d.	a motive for existing firms to decrease prices.
e.	product differentiation.

   76.   If monopolistically competitive firms are making positive economic profits, then new firms would:

a.	reduce their costs.
b.	charge higher prices.
c.	make demand more inelastic.
d.	leave the industry.
e.	begin to enter the industry.

   77.   As new firms enter a monopolistically competitive industry, it can be expected that:

a.	market price will rise.
b.	the output of existing firms will rise.
c.	profits of existing firms will fall.
d.	market demand will rise.
e.	the profits of existing firms will rise.

   78.   Entry of new firms will continue in a monopolistically competitive industry until:

a.	marginal cost = 0 (zero).
b.	marginal revenue = 0 (zero).
c.	marginal revenue = marginal cost.
d.	economic profit equals zero.
e.	economic profit is negative.

   79.   We can represent the entry of new firms into a monopolistically competitive market by shifting the existing firms’:

a.	demand curves downward.
b.	demand curves upward.
c.	marginal revenue curves upward.
d.	cost curves upward.
e.	cost curves downward.

   80.   The entry of new firms into a monopolistically competitive industry causes the:

a.	market demand curve to shift right.
b.	market demand curve to shift left.
c.	existing firm’s demand curve to shift right.
d.	existing firm’s demand curve to shift left.
e.	market supply curve to shift left.

   81.   Refer to the accompanying graph. If all firms in a monopolistically competitive industry have demand and cost curves like those shown, we would expect that, in the long run,

a.	all firms will leave the industry.
b.	a certain percentage of existing firms will exit the industry.
c.	firms in the industry earn negative economic profits.
d.	new firms will enter the industry.
e.	enough new firms will enter the industry that it will become perfectly competitive.

   82.   Refer to the accompanying graph. If all firms in the industry are the same as the monopolistically competitive firm shown, the long run will reflect:

a.	firms leaving the industry.
b.	all firms earning positive economic profits.
c.	some firms earning positive economic profit and others experiencing economic loss.
d.	competition from new firms that enter the industry.
e.	all firms earning economic profit of exactly $300 per day.

   83.   You operate a monopolistically competitive firm and you notice that your company is making an economic profit. Which of the following is most likely to happen?

a.	Other firms in your industry will raise their prices.
b.	Other firms will enter your industry and your demand curve will shift left.
c.	Other firms will enter your industry and your demand curve will shift right.
d.	Your firm will be forced to exit the industry.
e.	Government regulators will investigate your firm for “excessive economic profit.”

   84.   The demand curve for a monopolistically competitive firm is downward sloping because of:

a.	high barriers to entry.
b.	product differentiation.
c.	the lack of firms in the industry.
d.	government regulation.
e.	identical cost curves for each firm.

   85.   Market power is best described as when the firm’s demand curve is:

a.	positively sloped.
b.	a horizontal line.
c.	a vertical line.
d.	downward-sloping.
e.	above the industry demand curve.

   86.   One could argue correctly that:

a.	all firms in any industry can earn short-run but not necessarily long-run positive economic profit.
b.	all firms in any industry can earn long-run but not necessarily short-run positive economic profit.
c.	all firms in any industry can earn both short-run and long-run positive economic profit.
d.	no firm in any industry can earn long-run positive economic profit because all price changes made by any firm will be followed by all of the other firms.
e.	all firms in any industry can earn short-run positive profit if economies of scale exist.

   87.   The difference between price and marginal cost is:

a.	marginal revenue.
b.	per-unit profit.
c.	average total revenue.
d.	markup.
e.	nothing in the long run; they must be the same.

   88.   A monopolistically competitive firm usually charges more than a perfectly competitive firm because:

a.	it is part of a group of firms that has formally agreed to control the price and the output of a product.
b.	its primary goal is to reap monopoly profits by replacing competition with cooperation.
c.	producing homogenous output is more expensive than producing differentiated output.
d.	producing differentiated output is more expensive than producing homogenous output.
e.	it has a monopoly, but potential entrants exist in the form of contestable markets.

   89.   Both perfectly competitive and monopolistically competitive industries have many firms, in fact so many that, in the long run:

a.	only one firm can survive in the industry, leading to monopoly.
b.	costs must increase due to diseconomies of scale.
c.	costs must decrease due to economies of scale.
d.	economic profit is “competed away.”
e.	economic profit can continue.

   90.   In a monopolistically competitive industry, price:

a.	will be lower than the competitive price due to cost savings.
b.	will exceed the monopoly price due to the destructiveness of competitive forces.
c.	cannot be predicted exactly because it is likely to lie between the competitive and monopoly prices.
d.	is contingent on the behavior of other firms because they are mutually interdependent.
e.	is most likely a bit higher than the competitive market price because of the cost of variety.

   91.   Perfect competition and monopolistic competition are similar because, under both market structures:

a.	there are zero economic profits in the long run.
b.	production takes place at minimum average total cost.
c.	there are just a few firms.
d.	the concentration ratio is relatively high.
e.	differentiated products are produced.

   92.   A generic product would be best described as one that is:

a.	perfectly differentiated.
b.	completely undifferentiated.
c.	heavily advertised.
d.	sold in a monopoly market.
e.	produced only in a perfectly competitive industry.

   93.   One thing that makes monopolistic competition similar to perfect competition is that, in the:

a.	long run, both are guaranteed positive economic profit.
b.	short run, both are guaranteed positive economic profit.
c.	short run, neither can earn positive economic profit.
d.	long run, both will earn zero economic profit.
e.	long run, both could earn positive economic profit, but monopolistic competitors will earn more than perfect competitors will.

   94.   A competitive firm would have:

a.	more elastic demand than a monopolistically competitive firm.
b.	more inelastic demand than a monopolistically competitive firm.
c.	an upward-sloping demand curve.
d.	a horizontal demand curve.
e.	bowed-in or bowed-out demand.

   95.   Which of the following is evidence of market power?

a.	Output changes as costs change.
b.	Output is fixed despite cost changes.
c.	The demand curve for the firm is horizontal.
d.	The firm has no control over price.
e.	Optimal output is less than industry output.

   96.   In the long run, monopolistically competitive firms like Hardee’s and Carl’s Jr. operate at a price that:

a.	allows them to make a small economic profit.
b.	drives economic profit to zero.
c.	equals marginal cost.
d.	equals average variable cost.
e.	equals minimum average total cost.

   97.   Excess capacity best describes the fact that:

a.	monopolistically competitive firms produce less than the cost-minimizing level of output.
b.	monopolistically competitive firms produce more than the cost-minimizing level of output.
c.	monopolistically competitive firms produce exactly the cost-minimizing level of output, but the monopolistically competitive industry produces more than that amount.
d.	monopolistically competitive firms could produce less if they wanted to, so they produce over the optimal capacity.
e.	perfectly competitive firms produce less than the cost-minimizing level of output, so they have excess capacity but monopolistically competitive firms do not.

   98.   Monopolistic competition is inefficient because:

a.	firms earn positive economic profits.
b.	the firms’ marginal costs and marginal revenues are not equal.
c.	price is not equal to the minimum average total cost.
d.	entry is difficult.
e.	the price is equal to the minimum average total cost.

   99.   A monopolistically competitive firm is inefficient because the firm:

a.	earns positive economic profit in the long run.
b.	is producing at an output amount that corresponds to marginal cost equal to price.
c.	is not maximizing its profit.
d.	produces an output where average total cost is not minimum.
e.	produces where price is equal to minimum average total cost.

100.   One source of economic inefficiency from monopolistic competition is:

a.	markup.
b.	less variety for consumers.
c.	more variety for consumers.
d.	higher costs because firms can enter the industry.
e.	lower marginal costs but higher average costs than with perfect competition.

101.   The concept of markup under monopolistic competition would best be described as the:

a.	attempt of firms to make their products look like those of other firms in the industry, thus “marking them up” in a similar style.
b.	attempt of firms to mark up their prices above those of their rivals.
c.	difference between total revenue and total cost of the monopolistic competitor.
d.	difference between the average total cost and the price of the monopolistic competitor.
e.	difference between the marginal cost and the price of the monopolistic competitor.

102.   Markup would not exist in:

a.	a monopoly.
b.	a cartel.
c.	an oligopoly.
d.	monopolistic competition.
e.	a competitive market.

103.   Markup would generally be lowest under:

a.	a monopoly.
b.	a cartel.
c.	an oligopoly.
d.	monopolistic competition.
e.	a collusive industry.

104.   Markup would generally be highest under:

a.	a monopoly.
b.	a cartel.
c.	an oligopoly.
d.	monopolistic competition.
e.	a competitive market.

105.   Which of the following is evidence of market power?

a.	markup
b.	Output is fixed despite cost changes.
c.	The demand curve for the firm is horizontal.
d.	The firm has perfect control over price.
e.	Optimal output is less than industry output.

106.   When a perfectly competitive firm or a monopolistically competitive firm is making zero economic profit:

a.	the industry is in equilibrium; no firms will want to enter or exit.
b.	those firms who don’t differentiate their product sufficiently will want to leave the market.
c.	those firms who wish to differentiate their product more will want to enter the market.
d.	market demand shifts to the right.
e.	the price of the output will rise in the long run.

107.   If a monopolistically competitive firm wants to maximize profits, it will increase production until:

a.	marginal revenue  average variable cost.
b.	marginal revenue = average total cost.
c.	marginal cost  marginal revenue.
d.	marginal revenue = average revenue.
e.	marginal revenue = marginal cost.

108.   Product differentiation makes the demand for a monopolistically competitive firm’s product:

a.	perfectly elastic.
b.	less elastic than in a competitive market.
c.	more elastic than in a competitive market.
d.	perfectly inelastic.
e.	less elastic than that of a monopoly.

109.   Advertising is designed to:

a.	increase the price elasticity of demand for the firm and shift the firm’s demand curve rightward.
b.	decrease the price elasticity of demand for the firm and shift the firm’s demand curve rightward.
c.	increase the price elasticity of demand for the industry and shift the firm’s demand curve rightward.
d.	decrease the price elasticity of demand for the industry but have no effect on the firm’s demand.
e.	cause the income elasticity of consumers to become zero.

110.   An industry (such as California cheese) might advertise so that cheese:

a.	is no longer viewed as homogeneous.
b.	will now be viewed as homogeneous for all producers.
c.	may be characterized by a horizontal demand curve.
d.	will now have a price elasticity of demand that is more elastic.
e.	will be sold in perfectly competitive markets.

111.   Bob watches advertising that makes him want to consume Bugles, a corn snack, after he hears that, for Bugles, “more is better.” Most people consider that all corn snack foods are not the same and that Doritos and other corn snacks are not perfect substitutes for Bugles. Based on this information, we would most accurately say that advertising probably caused:

a.	Bob’s demand to be more elastic, and the corn-snack industry is likely to be a monopolistically competitive industry.
b.	Bob’s demand to be less elastic, and the corn-snack industry is likely to be a monopoly industry.
c.	the corn-snack industry demand to be less elastic, and Bob’s demand was unaffected.
d.	the corn-snack industry to become a monopoly, whereas prior to advertising, it was probably perfectly competitive.
e.	Bob’s demand to be less elastic, and the corn-snack industry is likely to be a monopolistically competitive industry.

112.   Successful advertising:

a.	generally causes a firm’s costs to fall.
b.	generally causes industry costs to fall.
c.	normally causes demand for the firm to shift right.
d.	normally causes industry demand to shift left.
e.	normally causes consumers to buy things for which they have no use.

113.   Because of successful advertising:

a.	the demand curve facing each firm shifts right, while the cost curves shift downward.
b.	the decisions of one seller often influences the price of products, the output, and the profits of rival firms.
c.	there is only one firm that produces a product for which there are no good substitutes.
d.	there are many sellers in the market and each is small relative to the total market.
e.	the demand curve facing each firm shifts right, while the cost curves shift upward.

114.   Successful advertising under monopolistic competition might:

a.	make the demand for a firm’s product more elastic.
b.	create a high barrier to entry.
c.	promote lower-quality products.
d.	reduce the price elasticity of demand for that firm’s output.
e.	help consumers understand why products in the industry are homogeneous.

115.   When would advertising be least effective?

a.	in a perfectly competitive industry
b.	in a monopolistically competitive industry
c.	in an oligopolistic industry
d.	in a monopoly industry
e.	Advertising is equally effective in all industries.

116.   Successful advertising would be most effective in the __________ industry.

a.	electric power transmission and distribution
b.	wheat production
c.	corn production
d.	wholesale coal
e.	restaurant

117.   Sart Bimpson, an economics student, believes that a beer sold by one particular shack on the beach is completely different from an identical beer produced by the same factory and sold by the luxury hotel adjacent to the shack. The response that would best describe Sart’s belief is:

a.	the luxury hotel and the shack are in a perfectly competitive industry.
b.	Sart thinks the luxury hotel is a monopoly seller of the beer.
c.	the luxury hotel and the shack are in a monopolistically competitive industry.
d.	Sart thinks the shack is in a perfectly competitive industry but the luxury hotel is in an oligopoly industry.
e.	Sart would say that, while beer is homogeneous, he perceives that the product is differentiated among the sellers.

118.   Why would perfectly competitive industries advertise even though individual firms do not?

a.	Even though the output of an individual firm would be considered homogeneous to other firms, the industry output would be differentiated (for example, Florida orange juice versus imports).
b.	Individual perfectly competitive firms don’t need to advertise because they already have market power, but the industry would need to advertise.
c.	Government price supports exist for most perfectly competitive producers so they don’t need to advertise, but industry price supports don’t generally exist.
d.	Industries advertise because they pay for commercials and it allows consumers to watch TV and listen to the radio for “free.”
e.	Individual firms produce perfectly differentiated output but the industry produces homogeneous output that needs to be differentiated.

119.   False advertising is generally regulated by:

a.	the Securities and Exchange Commission (SEC).
b.	the Federal Trade Commission (FTC).
c.	the antitrust division of the Department of Justice.
d.	state and local governments.
e.	the Nuclear Regulatory Commission (NRC).

120.   There is a discussion of Kevin Trudeau in your textbook. Which answer below best describes him?

a.	He is the head of the Securities and Exchange Commission (SEC).
b.	He was sued by the Federal Trade Commission (FTC) for false advertising in 1998.
c.	He is the former CEO of Enron.
d.	He is the former prime minister of Canada.
e.	He is the former head of the FTC.

121.   A franchise might be worth $1 million or more because:

a.	it guarantees the owner a long-run economic profit.
b.	it guarantees the owner positive economic profit.
c.	product differentiation results in brand loyalty, which can be very profitable.
d.	it gives the owner a pure monopoly.
e.	it allows the franchisee to sell a homogeneous product.

122.   One drawback to advertising might be that it could easily:

a.	raise costs but not increase demand.
b.	raise revenue but not increase demand.
c.	decrease revenue and raise demand.
d.	decrease costs and decrease demand.
e.	cause a monopolistically competitive firm to become a monopoly.

123.   If a firm engages in false advertising, it might be:

a.	shut down by the Securities and Exchange Commission (SEC).
b.	investigated by the Federal Trade Commission (FTC) and have its products removed from the market.
c.	shut down by the Department of Justice.
d.	investigated by the Stock Market Investigation Bureau (SMIB).
e.	subject to “penalty by collusion.”