a. The demand curve facing a monopolistic competitor in a market where all producers charge different prices becomes less elastic when it engages in international trade b. According to the gravity equation, countries closer to each other trade more c. The only gain from trade in monopolistic competition in trade is lower prices d. The closer to i the index of intra industry trade is, the greater the difference between exports and imports of the same goods.

a. The demand curve facing a monopolistic competitor in a market where all producers charge different prices becomes less elastic when it engages in international trade b. According to the gravity equation, countries closer to each other trade more c. The only gain from trade in monopolistic competition in trade is lower prices d. The closer to i the index of intra industry trade is, the greater the difference between exports and imports of the same goods.

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: Monopolistic Competition

Section: Chapter Questions

Problem 4QCMC

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Similar questions

Aside from advertising, how can monopolistically competitive films increase demand for their products?
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?
Continuing with the scenario in question 1, 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 film outside. As those films capture the original films profit, what will happen to the original films profit-maximizing price and output levels?
How can a monopolistic competitor tell whether the price it is charging will cause the firm to earn profits or experience losses?
Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the monopolists profit-maximizing output level. Now, think about a slightly higher level of output (sayQ0+1). According to the graph, is there any consumer willing to pay more than the marginal cost of that new level of output? If so, what does this mean?
Imagine a monopolist could charge a different price to every customer based on how much he or she were willing to pay. How would this affect monopoly profits?
Is a monopolistically competitive firm productively efficient? Is it allocatively efficient? Why or why not?
Suppose that, due to a successful advertising campaign, a monopolistic competitor experiences an increase in demand for its product. How will that affect the price it charges and the quantity it supplies?
What stops oligopolists from acting together as a monopolist and earning the highest possible level of profits?
Imagine that you ale managing a small firm and thinking about entering the market of a monopolist. The monopolist is currently charging a high price, and you have calculated that you can make a nice profit charging 10 less than the monopolist. Before you go ahead and challenge the monopolist, what possibility should you consider for how the monopolist might react?
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