QUESTION 26PriceMC160140ATC123.33Demand9056.67MR100133.33 154.92QuantityThe figure is drawn for a monopolistically-competitive firm. In response to the situation in this graph, we would expectO a. many new firms to enter this marketO b. this firm to gain positive profit in the long runO c. this firm's profit to move from its current value toward zero in the long runO d. All of the above are correct

A monopolistically competitive market has a large number of buyers and sellers. The existance of low…

QUESTION 26 Price MC 160 140 ATC 123.33 Demand 90 56.67 MR 100 133.33 154.92 Quantity The figure is drawn for a monopolistically-competitive firm. In response to the situation in this graph, we would ex a. many new firms to enter this market O b. this firm to gain positive profit in the long run O c. this firm's profit to move from its current value toward zero in the long run O d. All of the above are correct

QUESTION 26 Price MC 160 140 ATC 123.33 Demand 90 56.67 MR 100 133.33 154.92 Quantity The figure is drawn for a monopolistically-competitive firm. In response to the situation in this graph, we would ex a. many new firms to enter this market O b. this firm to gain positive profit in the long run O c. this firm's profit to move from its current value toward zero in the long run O d. All of the above are correct

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter14: Monopolistic Competition And Product Differentiation

Section: Chapter Questions

Problem 10P

See similar textbooks

Similar questions

What is the relationship between product differentiation and monopolistic competition?
Aside from advertising, how can monopolistically competitive films increase demand for their products?
Andreas Day Spa began to offer a relaxing aromatherapy treatment. The film asks you how much to charge to maximize profits. The first two columns in Table 10.5 provide the price and quantity for the demand curve for treatments. The third column shows its total costs. For each level of output, calculate total revenue, marginal revenue, average cost, and marginal cost. What is the profit-maximizing level of output for the treatments and how much will the firm earn in profits?
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?
Ajax Cleaning Products is a medium-sized firm operating in an industry dominated by one large firmâ€”Tile King. Ajax produces a multiheaded tunnel wall scrubber that is similar to a model produced by Tile King. Ajax decides to charge the same price as Tile King to avoid the possibility of a price war. The pnce charged by Tile King is $20,000. Ajax has the following short-run cost curve: TC=800,0005,000Q+100Q2 Compute the marginal cost curve for Ajax. Given Ajaxs pricing strategy, what is the marginal venue function for Ajax? Compute the profit-maximizing level of output for Ajax. Compute Ajaxs total dollar profits.
Is a monopolistically competitive firm productively efficient? Is it allocatively efficient? Why or why not?
How can a monopolistic competitor tell whether the price it is charging will cause the firm to earn profits or experience losses?
22. If a monopolistic competitor is prodocing an eutput for which marginal revenue is$40and marginal cast is 532 to maximize profits the finm should A. desrast the level of output. B. keep the level of eutput eonstaet. C. coctinue to make 58 per unit D. increzese the level of output.
$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
Exercise A.4. A company operating in a market of monopolistic competition has an inverse demand curve for its product: P=315-3q, where q is the number of units produced of the good and P its price. The total cost of production of this company is given by: TC(q)=q²+75q+4000. a) To maximize profits, how many units of the good should you sell? b) What price should I charge? (c) What benefits would it reap? (d) Given the above information, how much would you have to reduce fixed costs for longterm equilibrium to occur? Represent graphically
Suppose that the market for e-readers is an oligopoly controlled by Amazon.com , Barnes and Noble,Sony, and Apple. Barnes and Noble is consideringincreasing its output. How would this affect themarket price? How would it affect the profits ofeach company?
Andrea’s Day Spa began to offer a relaxingaromatherapy treatment. The firm asks you how muchto charge to maximize profits. The first two columnsin Table 10.5 provide the price and quantity for thedemand curve for treatments. The third column showsits total costs. For each level of output, calculate totalrevenue, marginal revenue, average cost, and marginalcost. What is the profit-maximizing level of output forthe treatments and how much will the firm earn inprofits?