answer c and d only The figure at right shows the revenue and cost curves for a typical monopolistically competitive firm in the short run.a. The very elastic demand curve reflects the fact thatO A. each firm produces a good for which there are no close substitutes.O B. each firm produces a good for which there are many close, but not perfect, substitutes.MCАТСРоC. each firm produces a good for which there are few close substitutes.bD. None of the above.P2db. The profit-maximizing level of output for the firm on the diagram isc. At the profit-maximizing level of output, profits areThe area in the diagram that represents the firm's profits isMRd. Firms willthe industry until profitsOutputO O O OPrice ($)

C) In the above diagram, the profit-maximizing condition for the firm is when MR=MC. This happens…

The figure at right shows the revenue and cost curves for a typical monopolistically competitive firm in the short run. a. The very elastic demand curve reflects the fact that O A. each firm produces a good for which there are no close substitutes. O B. each firm produces a good for which there are many close, but not perfect, substitutes. MC ATC OC. each firm produces a good for which there are few close substitutes. O D. None of the above. b. The profit-maximizing level of output for the firm on the diagram is D C. At the profit-maximizing level of output, profits are The area in the diagram that represents the firm's profits is MR d. Firms will V the industry until profits Output

The figure at right shows the revenue and cost curves for a typical monopolistically competitive firm in the short run. a. The very elastic demand curve reflects the fact that O A. each firm produces a good for which there are no close substitutes. O B. each firm produces a good for which there are many close, but not perfect, substitutes. MC ATC OC. each firm produces a good for which there are few close substitutes. O D. None of the above. b. The profit-maximizing level of output for the firm on the diagram is D C. At the profit-maximizing level of output, profits are The area in the diagram that represents the firm's profits is MR d. Firms will V the industry until profits Output

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 1.1P

See similar textbooks

Similar questions

Continuing with the scenario in question 1, in the long run, the positive economic profits that the monopolistic competitor earns will attract a response either from existing firms in the industry or film outside. As those films capture the original films profit, what will happen to the original films profit-maximizing price and output levels?
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?
Aside from advertising, how can monopolistically competitive films increase demand for their products?
The American market for shoes is a good example of monopolistic competition. In a situation where Adidas is earning a large economic profit in the short-run, Nikemay try to increase their advertising to capture some of that business, If Nike is successful in their campaign, what would happen to the demand curve for Adidas and the price at which they can sell?O a. The demand curve shifts up and to the right, and the price rises.O b. The demand curve shifts up and to the right, and the price falls.O c. The demand curve shifts down and to the left, and the price walls.O d. The demand curve shifts down and to the left, and the price rises.Oe. Nike cannot affect the demand for Adidas since this is a monopolistically competitive market.
Suppose you operate in a monopoly environment and you set your price inorder to achieve maximum prots. Is your demand elastic, unitary elastic, or inelastic? Does your answer change if you were in a monopolistically competitive market? What happens to the elasticity when you go from a monopolistic market to a monopolistically competitive one? Explain and give an example. Retailer companies sell many products for which manufacturers have a sug-gested retail price printed on the package. Is there an economic reason for this price? If you are the manager of a retailing outlet, what factors will determine whether you should charge the suggested retail price or some higher or lower price?
(Monopolistic Competition and Perfect Competition Compared)Illustrated below are the marginal cost and averagetotal cost curves for a small firm that is in long-runequilibrium.a. Locate the long-run equilibrium price and quantity ifthe firm is perfectly competitive.b. Label the price and quantity p1 and q1.c. Draw in a demand and marginal revenue curve to illustratelong-run equilibrium if the firm is monopolisticallycompetitive. Label the price and quantity p2 and q2 .d. How do the monopolistically competitive firm’s priceand output compare to those of the perfectly competitivefirm?e. How do long-run profits compare for the two types offirms?
How do perfectly competitive firms, monopolists, monopolistically competitive firms, and cartels choose the profit -maximizing quantity? A) The quantity at which average total cost is minimizedB) The quantity at which total revenue and total cost are equalC) The quantity at which total revenue is maximizedD) The quantity at which marginal revenue and marginal cost are equal
1. If the firms in a monopolistically competitive marketare earning economic profits or losses in the short run,would you expect them to continue doing so in the longrun? Why? 2. Is a monopolistically competitive firmproductively efficient? Is it allocatively efficient? Whyor why not? 3. What stops oligopolists from acting together asa monopolist and earning the highest possible level ofprofits?
Explain the profit-maximizing output leveland profitof a monopolistic firm by drawing a graph. What are the advantages of internal economies of scale? Explain them briefly. What is the meaning of ‘acceptable loss’for a perfectly competitive firm ? Draw a graph and explain. How can we increase the Total Revenue of productsby using elasticity? Explain them briefly.
a) Can the threat of a price war deter entry by potential competitors? What actions might a firm take to make this threat credible? b)Why is the firm’s demand curve flatter than the total market demand curve in monopolistic competition? Suppose a monopolistically competitive firm is making a profit in the short run. What will happen to its demand curve in the long run?
Assume that in short-run equilibrium, a particular monopolistically competitive firm charges $12 for each unit of its output and sells 52 units of output per day. The average total cost (ATC) for those 52 units is $10.Instruction: Round your answers below to the nearest whole number.How much revenue will the firm take in each day? $ What will be the firm's economic profit or loss? of $ Next, suppose that entry or exit occurs in this monopolistically competitive industry and establishes a long-run equilibrium.If the firm’s daily output remains at 52 units, what price will it be able to charge? $ What will be its economic profit or loss? of $
1. In comparison to a monopolist, is the elasticity of the demand curve more or less elastic than a monopolistic competitive firm? Explain your answer. 2. Can this monopolistic competitive firm earn a profit in the long-run? Explain your reasoning. 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.