5. What is the relationship between product differentiation and monopolistic competition?
6. How is the perceived demand curve for a monopolistically competitive firm different from the perceived
demand curve for a monopoly or a perfectly competitive firm?
7. How does a monopolistic competitor choose its profit-maximizing quantity of output and price?
8. How can a monopolistic competitor tell whether the price it is charging will cause the firm to earn profits
or experience losses?
9. If the firms in a monopolistically competitive market are earning economic profits or losses in the short
run, would you expect them to continue doing so in the long run? Why?
10. Is a monopolistically competitive firm productively efficient? Is it allocatively efficient? Why or why not?
11. Will the firms in an oligopoly act more like a monopoly or more like competitors? Briefly explain.
12. Does each individual in a prisoner’s dilemma benefit more from cooperation or from pursuing selfinterest? Explain briefly.
13. What stops oligopolists from acting together as a monopolist and earning the highest possible level of
profits?