John operates a small burger shop on State Street in a monopolistically competitive burger restaurant industry. In the long-run equilibrium, the profit-maximizing price of the Deluxe burger is $4. Price also equal John’s average total cost. John’s minimum average total cost is less than $4. Group of answer choices True False

John operates a small burger shop on State Street in a monopolistically competitive burger restaurant industry. In the long-run equilibrium, the profit-maximizing price of the Deluxe burger is $4. Price also equal John’s average total cost. John’s minimum average total cost is less than $4. Group of answer choices True False

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter10: Monopolistic Competition And Oligoply

Section: Chapter Questions

Problem 6SQ

See similar textbooks

Similar questions

Because monopolistically competitive firms produce differentiated products, they will: Select one: a. face a perfectly elastic demand curve. b. face a downward-sloping demand curve. c. be unable to create any degree of product loyalty. d. never need advertising.
As firms enter and exit a monopolistically competitive market, what happens to productive efficiency in the long run? Group of answer choices 1-Productive efficiency will not be reached because in the long run, economic profits reach equilibrium. 2-Prices will rise to unprecedented levels, and productive efficiency will be reached. 3-The strongest firms will survive and the market will morph into an oligopolistic market. 4-Price will eventually intersect the average cost curve at a point where price > average cost, and productive efficiency will not be reached
Airline is a monopolistically competitive market with different name brands such as United Airline, JetBlue, Virgin Airline, etc. A law that restricts the ability of airlines to advertise on billboards in Las Vegas, a resort destination, would likely lead to increased price competition among airline business in Las Vegas. reduced efficiency of Las Vegas airline markets. consumers requesting an increase in the number of billboards in Las Vegas. no change in profits for all airline businesses in Las Vegas.
Evaluate the following statement: “Managers should specialize by acquiring only the tools needed to operate in a particular market structure. That is, managers should specialize in managing either a perfectly competitive, monopoly, monopolistically competitive, or oligopoly firm.”
Monopolistic Competition:Apple is one of many firms that is a supplier in the market for smart phones Apple’s iPhones are considered to be relatively high-end smart phones due to their design’s attention to style and their place in the ecosystem of complementary Apple products Both qualities set them apart from other producers’ smart phone offerings Assume that Apple is currently earning short-run economic profits On a correctly labeled diagram, show Apple’s profit-maximizing output (Q*) and price (P*), as well as the area that represents the firm’s profits What happens to Apple’s price, output, and profit in the long-run? Illustrate your answer on another diagram At the profit maximizing prices you identified in parts (a) & (b), is Apple producing at the efficient scale? Support your answer with no more than two sentences If you were Tim Cook, the CEO of Apple, and one of your analysts informs you that after looking carefully at the Apple Watch…
All of the following are characteristics of long-run equilibrium for firms in a monopolistically competitive market except: A. price equals marginal cost. B. price equals average total cost. C. price exceeds the minimum of average total cost. D. marginal cost equals marginal revenue.
Suppose you manage a firm in a monopolisticallycompetitive market. Which of the following strategies will do a better job of helping you maintaineconomic profits: obtaining a celebrity endorsement for your product or supporting the entry offirms that will compete directly with your biggestrival? Explain your answer.
You are hired as a consultant to a monopolistically competitive firm. The firm reports the following information about its price, marginal cost, and average total cost. Can the firm possibly be maximizing profit? If not, what should it do to increase profit? If the firm is maximizing profit, is the market in a long-run equilibrium? If not, what will happen to restore long-run equilibrium? P < MC, P > ATC P > MC, P < ATC P = MC, P > ATC P > MC, P = ATC