For a monopolistic competitor: choose correct and exlain your choice a. P = ATC in long-run equilibrium. b. P > ATC in long-run equilibrium. c. P = MR in long-run equilibrium. d. P = MC in long-run equilibrium.
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For a monopolistic competitor: choose correct and exlain your choice
a. P =
b. P > ATC in long-run equilibrium.
c. P = MR in long-run equilibrium.
d. P = MC in long-run equilibrium.
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- For market failure unit (market power). In the long run graph for monopolistic competition, firms are no longer earning abnormal profit due to low barriers to entry as there are more similar goods on the market, lowering demand, causing them to earn normal profits, however, shouldn't that cause MR to be equal to AR (demand curve), similar to the normal profit in perfect competition? Why is MR less than AR here when it is earning normal profit?In prices. market structure, firms sell differentiated products but due t A) a monopolistic competition B) an oligopoly a monopoly D a perfect competition Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.Answer completely and accurate answer.Rest assured, you will receive an upvote if the answer is accurate.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
- Candak Corporation produces professional quality digital cameras. The market for professional digital cameras is monopolistically competitive. Assume that the inverse demand curve faced by Candak (given its competitors’ prices) can be expressed as P = 5,000 - .2Q and Candak’s total costs can be expressed as TC = 20,000,000 + .05Q2. Answer the following questions. A. What price and quantity will Candak choose? B. Is this likely to be a long-run equilibrium for Candak Corporation? Why or why not? If not, what is likely to happen in the market for professional digital cameras, and how will it affect Candak?Consider perfect competition and monopolistic competition. In which market structure(s) will we see firms trending toward zero economic profits in the long-run equilibrium? a perfect competition b monopolistic competition c both perfect and monopolistic competition d neitherwhich market structure(s) might firms produce a homogeneous product? Answer a. perfect competition only. b. monopoly only. c. monopolistic competition only. d. perfect competition and monopolistic competition. e. perfect competition and oligopoly.
- In what sense do monopolistically competitive firms have market power? Question 1Answer a. Firms in the long run will earn zero economic profits b. The demand curve that a typical firm faces is negatively sloped c. Because of brand loyalty, a firm can raise the price of its product without worrying that any of its customers will switch to buy other similar brands d. All of the answers are correctSuppose the monopolistically competitive barber shop industry in a community is in long-run equilibrium, and that the typical price is $20 per haircut. Moreover, the population is rising. 1. Illustrate the short-run effects of a change on the price and output of a typical firm in the market. 2. Show what happens in the long run. Will the final price be higher than $20? Equal $20? Be less than $20? Assume that nothing happens to the cost of producing haircuts. 3. Suppose that, initially, the price of a typical children’s haircut is $10. Do you think this represents price discrimination? Why or why not?Evaluate the model of Monopolistic Competition. What are the key assumptions? Do you think this model is useful for explaining many "real world" businesses? Why or why not? How does it compare in this regard to the models of perfect competition and monopoly?
- 1. Under the model of monopolistic competition, a(an) ________ in the number of firms in the industry will cause ________ to ________. 2. In the model of monopolistic competition, if the price is ______ than average costs, then firms are earning __________ economic profit and we should expect firms to _________ the industry. 3. In the model of monopolistic competition, if an industry has large ________ relative to another industry, then we should expect _________ firms to operate in a long-run equilibrium of that industry.Q2. Which model's equilibrium price and quantity most closely matches perfect competition? a. Bertrand Competition with Identical Goods b. Stackelberg Duopoly c. Monopolistic Competition d. Cournot OligopolyCritically evaluate and explain:a. In monopolistically competitive industries, economic profits are competed away in the long run; hence, there is no valid reason to criticize the performance and efficiency of such industries. b. In the long run, monopolistic competition leads to a monopolistic price but not to monopolistic profits.
