Suppose that a monopolistically competitive restaurant is currently serving 240 meals per day(the output where MR = MC). At that output level, ATC per meal is $10 and consumers arewilling to pay $12 per meal.Instructions: Enter your answers as whole numbers.What is the size of this firm's profit or loss? $0Will there be entry or exit? Click to select)As a result, will this restaurant's demand curve shift left or right? ((Cick to select)Assume that the allocatively efficient output level in long-run equilibrium is 200 meals. Inlong-run equilibrium, suppose that this restaurant charges $11 per meal for 180 meals andthat the marginal cost of the 180th meal is $8.What is the size of the firm's profit? $[Suppose that the allocatively efficient output level in long-run equilibrium is 200 meals. Inlong-run equilibrium, suppose that this restaurant charges $11 per meal for 180 meals andthat the marginal cost of the 180th meal is $8.Is the deadweight loss for this firm greater than or less than $60? (Click to select)

Suppose that a monopolistically competitive restaurant is currently serving 240 meals per day (the output where MR = MC). At that output level, ATC per meal is $10 and consumers are willing to pay $12 per meal. Instructions: Enter your answers as whole numbers. What is the size of this firm's profit or loss? $0 Will there be entry or exit? Click to select) As a result, will this restaurant's demand curve shift left or right? (Cick to select)

Suppose that a monopolistically competitive restaurant is currently serving 240 meals per day (the output where MR = MC). At that output level, ATC per meal is $10 and consumers are willing to pay $12 per meal. Instructions: Enter your answers as whole numbers. What is the size of this firm's profit or loss? $0 Will there be entry or exit? Click to select) As a result, will this restaurant's demand curve shift left or right? (Cick to select)

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter14: Monopolistic Competition And Product Differentiation

Section: Chapter Questions

Problem 16P

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Suppose that a monopolistically competitive restaurant is currently serving 230 meals per day (the output where MR = MC). At that output level, ATC per meal is $10 and consumers are willing to pay $12 per meal. What is the size of this firm’s profit or loss? Will there be entry or exit? Will this restaurant’s demand curve shift left or right? In long-run equilibrium, suppose that this restaurant charges $11 per meal for 180 meals and that the marginal cost of the 180th meal is $8. What is the size of the firm’s profit? Suppose that the allocatively efficient output level in long-run equilibrium is 200 meals. Is the deadweight loss for this firm greater than or less than $60
Explain the difference in market power between perfectly competitive firms and monopolistically competitive firms. Which firms have more control over prices and/or output? Why? What are some industry examples of each type of market structure?
Mary competes in a monopolistically competitive market. Suddenly, 5 new firms enter the market, causing her perceived demand curve to shift. The following tables show her original and new demand curves and her cost information. Original Demand Curve Price Quantity TC 30 0 $130 25 10 $140 20 20 $260 15 30 $450 10 40 $660 New Demand Curve Price Quantity TC 25 0 $130 20 10 $140 15 20 $260 10 30 $450 5 40 $660 Assume that Mary can only choose from the quantities of output given in the table. By how much will the quantity that she produces change after the new firms enter the market? Question 4 options: increase by 5 decrease by 5 increase by 10 decrease by 10
in the long run, representative firms in monopolistically competitive markets will just break even --- that is, earn zero economic profits. Yet some firms in highly competitive markets manage to continue to earn economic profits indefinitely. For example, perfumes, cosmetics, and hair care firm L’Oreal, in business since 1907, remains highly profitable today, despite competing in fiercely competitive product categories. How has L’Oreal managed to stay profitable for so long (clue: they have a research and development staff of over 1000 people).
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