A monopolistically competitive firm in the long run will a. have a demand curve above its AC. b. have a demand curve tangent to its AC. c. operate where excessive profit can be achieved. d. have a demand curve below its AC.

A monopolistically competitive firm in the long run will a. have a demand curve above its AC. b. have a demand curve tangent to its AC. c. operate where excessive profit can be achieved. d. have a demand curve below its AC.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter14: Monopolistic Competition And Product Differentiation

Section: Chapter Questions

Problem 6P

See similar textbooks

Related questions

Q: What is true about the price that is charged in the short run by a firm in monopolistic competition?…

A: In monopolistic competition, the firm sells the product at a price when its marginal cost is equal…

Q: In the long run the demand curve that a monopolistic competitor faces for its product will likely:…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: he graph below is for Chic and Sharpe Ltd., a firm in the women’s garment industry, which is…

A: Hi Student, thanks for posting the question. As per the guideline we are providing answers for the…

Q: CYou are the manager of a monopolistically competitive firm. The present demand curve you face is P…

A: here we can find the given as follow

Q: For a monopolistic competitor: Choose correct and explain your choice a. P=MR. b. P>MR. c. P=MC.…

A: The answer is - b. P>MR

Q: Draw a diagram containing the long-run average and marginal cost curves, the demand curve facing the…

A: The monopolistic competitive market is one with many sellers selling similar, but not identical,…

Q: What effect would a successful advertising campaign differentiating a product from one's competitors…

A: Definition; Product advertising is paid promotional communication aimed at persuading consumers to…

Q: Fresh Taste, Inc. produces organic breakfast cereals. The market for breakfast cereals is…

A: The correct option is A The firm's excess capacity is 4000 boxes

Q: If you have a graph showing a monopolistic competitive situation in which demand shifts to the left…

A: There is a relationship between the marginal revenue and the demand curve. Marginal curve is half to…

Q: Monopolistically competitive firms in a market face the following demand and costs, where P is…

A: Given; Demand function; Q=200N-P P=200N-QTotal Cost; TC=8+Q2

Q: If a monopolistically competitive market became perfectly competitive, output would likely: Choose…

A: Monopolistic competition: - monopolistic market structure is the structure in which there is a large…

Q: What is the best market structure between perfect competition vs monopolistic competition? Why?…

A: Perfect competition and monopolistic competition are forms of market. In the perfect competition,…

Q: For a monopolistic competitor: choose correct and exlain your choice a. P = ATC in long-run…

A: Monopolistic competition refers to the competition that occurs when an industry has many firms…

Q: For a monopolistic firm, its demand is P = 200 - 0.25Q while MR = 200-0.5Q, if its MC = ATC = 20,…

A: Monopolistic firm will maximize profit at the point where the MR= MC. That is: 200-0.5Q=20…

Q: One difference between perfect competition and monopolistic competition is that A) monopolistic…

A: Perfect competition is a market structure in which many firms selling homogenous product with free…

Q: Monopolistic competition creates inefficiency because of the Price markups and excess capacity. The…

A: Monopolistic competition is an imperfect market condition which is characterized by the presence of…

Q: A pure monopolistic firm knows the following about its costs and revenue. The firm would like to…

Q: Suppose a firm operating in a market characterized as monopolistic competition is making positive…

A: Monopolistic competition refers to the competition wherein there are large numbers of firms…

Q: For a monopolistic firm, its demand is P = 200 - 0.25Q while MR = 200-0.5Q, if its MC = 20, how much…

A: A monopolistic firm can adjust its output and price in order to maximize the profits. Demand is…

Q: A monopolistic competitor maximizes proft by producing 165 units at a marginal cost of $8. The…

A: GIVEN DETA A monopolistic competitor maximizes proft by producing 165 units a marginal cost of…

Q: n the graphs below, which one best describes the short-run equilibrium, and which one best describes…

A: In the given graphs:- Basics of equilibrium:- When Marginal Revenue is equal to Marginal Cost and…

Q: What is perfect competition? Distinguish it to monopolistic competition

A: Perfect Competition in actual world is a imaginary market that is it does not exists in the real…

Q: Do you expect that an increase in the price of a product generates a larger decrease in quantity…

A: When talking about a monopolistically competitive market, it can be said that there ar relatively…

Q: What is the main difference between a perfectly competitive industry and a monopolistically…

A: What is the main difference between a perfectly competitive industry and a monopolistically…

Q: How do perfectly competitive firms, monopolists, monopolistically competitive firms, and cartels…

A: Basics:- Profit maximization condition in all the market types:- Marginal Revenue = Marginal Cost…

Q: Output Price FC VC TC TR…

A: Monopolistic competition: It refers to that competition in which the producer has no choice to…

Q: A. How does the demand curve faced by the firm in monopolistically competitive market differ from…

A: A monopolistically competitive market and a perfectly competitive market are similar in many…

Q: The major difference between a monopolistic competition and monopoly is, a. monopoly is a price…

A: Monopoly refers to the form of market in which there is only a single seller who selling the unique…

Q: a. With the aid of a diagram explain how a monopolist determines how much output to produce and what…

A: Market Structure depicts how firms are being differentiated and also categorised based upon types of…

Q: £/unit 100 90 SRMC 80 70 60 50 40 30 SRAC 20 10 MR D= AR 10 20 30 40 50 60 70 80 90 100 Units Figure…

A: Profit maximizing condition for a monopolistic firm:-…

Q: monopolistically competitive market

A: Correct option is (A).

Q: The theory of monopolistic competition predictsthat in long-run equilibrium, a…

A: OPTION A : Price = LRAC Under monopolistic competition: In short run, equilibrium is attained when…

Q: Consider a monopolistically competitive market with N firms. Each firm's business opportunities are…

A: Q=100/N-P MR=100/N -2Q TC = 50 + Q2 MC= 2Q

Q: The perceived demand for a monopolistic competitor O is flat. O is steep. O disregards competitors.…

Q: draw and explain a diagram to show the long run equilibrium in a monopolistically competitive…

A: The three key attributes of monopolistic competition is listed below. Large number of sellers:…

Q: How does advertising impact monopolistically competitive firms? (a) advertising always causes…

A: A market with monopolistic competition has many firms selling differentiated products. Monopolistic…

Q: Refer to Figure#4. This figure depicts a situation in a monopolistically competitive market. In…

A: Monopolistically competitive market has the following profit maximizing condition ie MR= MC From…

Q: following is not true of a monopolistically competitive firm? a. The firm will not likely earn…

A: The ‘monopolistic competitive market’ is one type of ‘imperfect competition’. Here large number of…

Q: Give an example of a market that has monopolistic competition and explain how the example you have…

A: Monopolistic competition is a kind of market structure where there are several competitors on the…

Q: The graph below summarizes the demand and costs for a firm that operates in a monopolistically…

A: A monopolistic market is a market where heterogeneous products are available in the market. There…

Question

A monopolistically competitive firm in the long run will

have a demand curve above its AC.

have a demand curve tangent to its AC.

operate where excessive profit can be achieved.

have a demand curve below its AC.

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

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?
What differentiates monopolistic competition from a monopoly?a A seller operating in a monopolistically competitive market no longar facet a downward-sloping demand curve,b. There are more seller,c. Firms can enter the market selling similar but not identical productd. (b) and (e)e. all of the above
In what way(s) is a monopolistically competitive firm inefficient? Group of answer choices It charges a price lower than marginal cost. It produces where marginal revenue is equal to marginal cost. It does not produce at the minimum of its average cost curve.
What differentiates monopolistic competition from a monopoly?a A seller operating in a monopolistically competitive market no longar facet a downward-sloping demand curve.b. There are more sellers.c. Firms can enter the market selling similar but not identical productd. (b) and (c)e. all of the above
Consider perfect competition and monopolistic competition. In which market structure(s) will we see price equal to marginal cost at the last unit produced in the long-run equilibrium? a perfect competition b monopolistic competition c both perfect and monopolistic competition d neither
How does advertising impact monopolistically competitive firms? (a) advertising always causes monopolistically competitive firms to experience lower average costs (b) it either causes a firm's perceiveddemand curve to become more elastic, or advertising causes demand for the firm's product to increase.
Comparing a perfectly versus monopolistic competitive market, in the long run what happens to prices and profits? a) Has equal profit and higher prices b) Has equal profit and lower prices c) Has equal profit and equal prices.
How do perfectly competitive firms, monopolists, monopolistically competitive firms, and cartels choose the profit -maximizing quantity? A) The quantity at which average total cost is minimizedB) The quantity at which total revenue and total cost are equalC) The quantity at which total revenue is maximizedD) The quantity at which marginal revenue and marginal cost are equal
If an industry is perfectly competitive or monopolistically competitive, then the government has relatively little reason for concern about a) the extent of competition. b) regulatory recapture. c) taking advantage of economies of scale. d) new ways of pleasing customers.
Do you expect that an increase in the price of a product generates a larger decrease in quantity demanded for a monopolistically competitive firm than it would for a monopoly? a/ yes; consumers will buy from competitors offering lower priced substitutes b/ no; conditions of imperfect competition means demand is constant c/ no; a monopolistic competitor perceives demand as a price maker d/ yes; but temporarily because price increases only create a short-run decline
Monopolistically competitive firm's are similar to monopolies in that they are able to earn economic profits in the long run. Do you agree with this statement if not, then why not?
A. How does the demand curve faced by the firm in monopolistically competitive market differ from the demand curve faced by a firm participating in a purely competitive market? b. How does that impact how the firm sets its price and the quantity the firm produces?