In a monopolistically competitive market, as new firms continue to enter, the demand that atypical firm faces continues to shift. It will stop when the demand becomesitsThis means a typical firm earnseconomic profits in the long run.1)2)3)4)Tangent to; ATC curve; zeroIntersecting; ATC curve; zeroTangent to; MC curve; zeroTangent to; ATC curve; positive

Monopolistic competition is a market structure that combines elements of both monopoly and perfect…

na monopolistically competitive market, as new firms continue to enter, the demand that a ypical firm faces continues to shift. It will stop when the demand becomes This means a typical firm earns its economic profits in the long run. Tangent to; ATC curve; zero Intersecting; ATC curve; zero Tangent to; MC curve; zero Tongont to: ATC curve: positive

na monopolistically competitive market, as new firms continue to enter, the demand that a ypical firm faces continues to shift. It will stop when the demand becomes This means a typical firm earns its economic profits in the long run. Tangent to; ATC curve; zero Intersecting; ATC curve; zero Tangent to; MC curve; zero Tongont to: ATC curve: positive

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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 correct
If a monopolistic firm earns above-normal profits, newcomers will enter the market and firm’s demand curve shiftsA. Down and to rightB. Up and to the rightC. Down and to the leftD. Up and to the left The following are the efforts by a manager to influence non-price influences except_____A. Advertising and promotionB. Market segmentationC. Loyalty programsD. Special customer serviceE. Lowering priceA monopolist has ______ market power.A. absoluteB. LowC. NoD. Low to high
The theory of monopolistic competition predictsthat in long-run equilibrium, a monopolisticallycompetitive firm willa. produce at the level in which price equalslong-run average cost.b. operate at minimum long-run average cost.c. overutilize its insufficient capacity.d. None of the above answers are correct.
true or false Monopolistic firms do not care about profits, their goal is to maximize total revenue.
Consider a monopolistically competitive market with NN firms. Each firm's business opportunities are described by the following equations: Demand: Q=100N−PQ=100N−P Marginal Revenue: MR=100N−2QMR=100N−2Q Total Cost: TC=50+Q2TC=50+Q2 Marginal Cost: MC=2QMC=2Q As N rises, the demand for each firm's product: rise or fall? How many units does each firm produce? a: 25 b: 400/N c: 25/N d: 25N What price does each firm charge? a: 75N b: 125/N c: 75/N d: 100/N How much profit does each firm make? a: 1,250/N*2−50 b: 2,500/N*2−50 c: 50+625/N*2 d: 1,875/N*2 In the long run, how many firms will exist in this market?
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.
A monopolistically competitive firm will increase itsproduction ifa. marginal revenue is greater than marginal cost.b. marginal revenue is greater than average total cost.c. price is greater than marginal cost.d. price is greater than average total cost.
If a monopolistically competitive firm is earning positive profits in the short-run, then we would expect more competition to enter the industry assuming there are no barrier to entry in the market: True or False
A short-run monopolistically competitive firm has the demand curve, where P = 20 - 2Q, and marginal revenue, where MR = 20 – 4Q. The firm also incurs a constant marginal and average total cost of MC = ATC = $10. a) Determine the optimal output of the firm. b) What is the price at the optimal output level? c) Calculate the profit or loss for the firm at the optimal output level. d) What will happen to this firm in the long run?
Which of the following conditions does NOT describe afirm in a monopolistically competitive market?a. It sells a product different from its competitors.b. It takes its price as given by market conditions.c. It maximizes profit both in the short run and inthe long run.d. It has the freedom to enter or exit in the long run.
In the short run, a monopolistically competitive firm calculates that marginal cost is $6.00, average total costs are $4.00, and marginal revenue is $3.00. The firm is charging a price of $6.00 and producing 200 units of output. How much profit is the firm making? What output recommendation would you make as the company economist? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
The Specialty Cake Store, a monopolistically competitive firm, is producing 200 decorated cakes per day and selling each cake for $12. At that production level ATC is $20, AVC is $15, AFC is $5, and both MR and MC are $8. This firm should Question 9Answer a. increase output to the point where price equals marginal cost. b. shut down and just pay fixed costs. c. decrease output to the point where marginal cost equals average cost. d. continue to produce 200 cakes, as price is greater than AFC.