A profit -maximizing producer in the monopolistically competitive industry,currently in long run equlibrium. Draw a labeled profit-maximization graph include labels of relevent cost and revenues curves (MC,ATC,MR,AR=D) Identify the profit maxizing quantity as Qpmp and price as Ppmp Identify the socially optimal level of output as Qso

A profit -maximizing producer in the monopolistically competitive industry,currently in long run equlibrium. Draw a labeled profit-maximization graph include labels of relevent cost and revenues curves (MC,ATC,MR,AR=D) Identify the profit maxizing quantity as Qpmp and price as Ppmp Identify the socially optimal level of output as Qso

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 1QFR

See similar textbooks

Similar questions

The demand and total cost functions for a monopolistically competitive market are: Q(P) = 300/N – P, where N = number of firms TC(Q) = 50 + Q2 There are currently three firms in this market and they are in a short run equilibrium. c) In the long run, how many firms are in the market (round to the nearest integer)?
Under conditions of monopolistic competition, firms may pursue a strategy of product differentiation.Explain what this strategy entails.
You are employed at a monopolistic company as a research (pricing) economist and you are deriving the behavior of two markets based on demand curves given by:D1(p1) = 50 - p1D2(p2) = 50 - 2p2 Assume that the marginal cost is constant at $8 a unit. (a) If it can price discriminate, what price should it charge in each market in order to maximize profits?(b) If it can’t price discriminate, what price should it charge?
How would a monopolistically competitive firm determine its profit maximizing level of output and price? Group of answer choices 1-The firm would use industry averages to determine the profit maximizing level of output and price. 2-A monopolistically competitive firm could set any output and price level to yield maximum profit because it controls all of the resources. 3-The firm would determine output based on the intersection of marginal cost and marginal revenue, then examine where that output level intersects with the demand curve to determine the price. 4-The firm would determine output based on the intersection of average cost and marginal cost, then examine where that output level intersects with the supply curve to determine the price.
Although the long run equilibrium of a monopolistically competitive markets involves zero economic profit likeperfect competition, the outcome is deemed to be inefficient. Why is that the case? Are there desirablecharacteristics of monopolistic competition that potentially balance some of the inefficiencies?
The demand and total cost functions for a monopolistically competitive market are: Q(P) = 300/N – P, where N = number of firms TC(Q) = 50 + Q² In the long run, how many firms are in the market (round to the nearest integer
If a firm is operating in a monopolistically competitive market, then in the long run: A. the firm will maximize its profit by producing the output level at which the marginal revenue is minimized. B. the firm will earn zero economic profit. C. the firm will maximize its profit by producing the output level at which the average cost is minimized. D. all of the above
A monopolistically competitive firm faces the following demand schedule for its product: The firm has total fixed costs of $9 and a constant marginal cost of $3 per unit. The firm will maximize profit with A)30 units of output. B)15 units of output. C)21 units of output. D)9 units of output. E)12 units of output.
Explain how long-run adjustments impact perfectly competitive, monopoly, and monopolistically competitive firms; discuss the ramifications of each of these market structures on social welfare.
You are a producer in a monopolistically competitive market of a good that is seen as being critical in the fight against the coronavirus (use hand sanitizer as an example), assume prior to the virus outbreak you had been producing a quantity that equated MR to MC and thereby allowed you to optimize your profitability. Further assume the price you are authorized to sell the product for has now been frozen by government order, and you have been mandated by government order to increase the quantity of the product you must produce to service the spike in market demand. Explain what you believe will happen to the profitability of this firm including in your answer what will happen to MC as your output expands and to your MR as price is forced to remain constant.
Due to a successful advertising campaign, a monopolistic competitor experiences an increase in demand for its product. In the long run, the positive economic profits that the monopolistic competitor earns will attract a response either from existing firms in the industry or firms outside. As those firms capture the original firm’s profit, what will happen to the original firm’s profit-maximizing price and output levels?
Suppose a monopolistically competitive firm is in long-run equilibrium. The firm's demand curve is tangent to its average cost curve at Q = 25. Average cost is minimized at Q = 35, where average cost is $50. Which of the following is true? Group of answer choices This firm maximizes profit at an output level of 35 units. This firm maximizes profit at an output level lower than 25 units. This firm maximizes profit at an output level of 25 units. This firm incurs an economic loss in the long run. This firm maximizes profit at an output level greater than 35 units.