$100 $90 MC АТС $80 $70 $60 $50 $40 $30 Demand = P $20 $10 MR $0 10 20 30 40 50 60 Output (Q) The firm shown in the diagram above is in long run equilibrium in a monopolistically competitive market. According to the graph, Excess Сарacity is units of Output. Select one: O a. 40 O b. 10 О с. 30 O d. 20

$100 $90 MC АТС $80 $70 $60 $50 $40 $30 Demand = P $20 $10 MR $0 10 20 30 40 50 60 Output (Q) The firm shown in the diagram above is in long run equilibrium in a monopolistically competitive market. According to the graph, Excess Сарacity is units of Output. Select one: O a. 40 O b. 10 О с. 30 O d. 20

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter24: Price-searcher Markets With High Entry Barriers

Section: Chapter Questions

Problem 13CQ

See similar textbooks

Similar questions

1.Amalgamated Popcorn, Inc. sells bags of flavored gourmet popcorn in a popular mall. As shop owner and operator, you have observed that weekly popcorn sales are well-described by the demand equation: Q = 1,200 -800P + 2.0A, where A denotes advertising weekly spending (in dollars). You are currently charging $1.50 per bag of popcorn (for which the marginal cost is $.75) and spending $500 per week on advertising. a) Compute the store’s price elasticity and advertising elasticity. b) Check whether your current $1.50 price is profit maximizing. If not, determine the store’s optimal quantity and price. c) Should the store consider increasing its advertising spending? Why or why not.
Only typed answer and don't use chatgpt otherwise I will downvote the answer Reference: Ref 11-2 (Exhibit: Profit Maximization for a Firm in Monopolistic Competition) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC'. Suppose further that after the innovation reduced the cost to ATC', it costs a total of $18 per unit to produce 170 units per day. If the firm charges a price equal to marginal cost, total net profit will be: a. $1,190. b. $3,400. c. $1,700. d . $3,060.
Duck Donuts sells plain and premium donuts. Premium donuts are plain donuts with special toppings. Demand for plain (PL) donuts is: PPL = 3 - 0.2QPL and Demand for premium (PR) donuts is: PPR = 4.4 - 0.4QPR The marginal cost for each is: MCPL = 0.20 MCPR = 0.40 Which of the following statements is true? a.Plain donuts generate more Total Revenue than premium donuts b.More premium donuts will sell than plain donuts c.Only premium donuts should be sold d.Only plain donuts should be sold e.Premium donuts generate more Total Profit than plain donuts
Yummy Yummy Popcorn, Inc. sells bags of flavored popcorn in a popular mall. As shop owner and operator, you have observed that weekly popcorn sales are well-described by the demand equation: Q = 1,200 - 800P + 2.0A, where A denotes advertising weekly spending (in dollars). You are currently charging $1.50 per bag of popcorn (for which the marginal cost is $.75) and spending $500 per week on advertising. a) Compute the store’s price elasticity and advertising elasticity. Please do fast ASAP fast please
$19 16 13 10 0 320. O 600. 100 280. MC 160180 210 Quantity MR Refer to the diagram for a monopolistically competitive firm in short-run equilibrium. This firm's profits will be: ATC -D Jhy
Q31 Plaex Building Systems Inc., a startup firm based in Hampstead, New Brunswick, is monopolistic firm with a sales schedule such that it can sell 22 prefabricated platics garages per week at $1,950 each, but if it restricts its output to 21 per week it can sell these at $2,000 each. The marginal revenue of the 22nd unit of sales per week is Multiple Choice $42,900. $1,950. $900. $432. $2,000.
Some firms have an incentive to advertise because they sell a a. homogeneous product and charge a price equal to marginal cost. b. homogeneous product and charge a price above marginal cost. c. differentiated product and charge a price equal to marginal cost. d. differentiated product and charge a price above marginal cost. For the economy as a whole, spending on advertising comprises about what percent of total firm revenue? a. 0.5 b. 2 c. 10 d. 20 Firms that spend the greatest percentage of their revenue on advertising tend to be firms that sell a. industrial products. b. homogeneous products. c. consumer goods for which there are no close substitutes. d. highly-differentiated consumer goods. Firm A produces and sells in a market that is characterized by highly differentiated consumer goods. Firm B produces and sells industrial products. Firm C produces and sells an agricultural commodity.…
Yummy Yummy Popcorn, Inc. sells bags of flavored popcorn in a popular mall. As shop owner and operator, you have observed that weekly popcorn sales are well-described by the demand equation: Q = 1,200 - 800P + 2.0A, where A denotes advertising weekly spending (in dollars). You are currently charging $1.50 per bag of popcorn (for which the marginal cost is $.75) and spending $500 per week on advertising. b) Check whether your current $1.50 price is profit maximizing. If not, determine the store’s optimal quantity and price. c) Should the store consider increasing its advertising spending? Why or why not. Please do fast ASAP fast
A firm with market power has an individual consumer demand of Q = 20 − 4P and total costs of C = 2Q. What is the optimal amount of this product to package in a single block? a. 12 b. 10 c. 6 d. 8
Qno3 AVAC is the only pharmaceutical firm producing a Vaccine. The Demand Curve for its product is Qd = 250 – 50 P where P is Price and Q are packs of vaccines in ‘000 Total Cost Function estimated by the firm is TC = 15 + 0.5Q where Q is monthly output. Required. a). What is the market structure of AVAC? State its characteristics. b). To maximize profit, i) What will be the optimum price and how many packs of Vaccine should the firm produce and sell per month? ii). If this number of packs is produced and sold, what will be the firm’s monthly profit? c). Using available information, draw AVAC’s demand, marginal revenue and marginal cost curves in a graph and clearly label thefirm’s profit maximizing price, quantity and profit. Do you observe any welfare loss? If so, also indicate and label the area on the graph.? d). Assume all other pharmaceutical firms in the market start producing the Vaccine and the market becomes competitive. What will…
1. Based on the best available econometric estimates, the market elasticity of demand for your firmâ€™s product is -2.5. The marginal cost of producing the product is constant at $100, while average total cost at current production levels is $175. Determine your optimal per unit price if: Instruction:Round your answers to two decimal places. a. You are a monopolist. $ b. You compete against one other firm in a Cournot oligopoly. $ c. You compete against 19 other firms in a Cournot oligopoly. $ 2. You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Group 1â€™s elasticity of demand is -2, while group 2â€™s is -6. Your marginal cost of producing the product is $10. a. Determine your optimal markups and prices under third-degree price discrimination. Instruction:Round your answers to two decimal places. Markup for group 1: Price for group 1: $ Markup for group 2: Price for group…
Q45 Assume that Bandai Namco is monopolist that can sell 11 units of its toy output at $13 per unit and 12 units at $12.40 per unit. For Bandai Namco to profitably produce and sell the twelfth unit of output, its marginal cost must be anywhere at or below Multiple Choice $13. $18. $12.40. $5.80. $8.20.