! You are hired as the consultant to a monopolistically competitive firm. The firm reports the following information about its price, marginal cost, and average total coCase A: P> MC, P= ATCCase B: P> MC, P< ATCCase A showsof a monopolistically competitive firm.The Case B shows a monopolistically competitive firm in thelong-run making losses.short-run making losses.long-run making profit.short-run making profit.

Here, price, marginal cost and average total cost of a Monopolistic firm is given in two cases.

You are hired as the consultant to a monopolistically competitive firm. The firm reports the following information about its price, marginal cost, and average total co Case A: P> MC, P = ATC Case B: P> MC, P<АТС Case A shows of a monopolistically competitive firm. The Case B shows a monopolistically competitive firm in the long-run making losses. short-run making losses. long-run making profit. short-run making profit.

You are hired as the consultant to a monopolistically competitive firm. The firm reports the following information about its price, marginal cost, and average total co Case A: P> MC, P = ATC Case B: P> MC, P<АТС Case A shows of a monopolistically competitive firm. The Case B shows a monopolistically competitive firm in the long-run making losses. short-run making losses. long-run making profit. short-run making profit.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: Monopolistic Competition

Section: Chapter Questions

Problem 5PA

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Similar questions

Aside from advertising, how can monopolistically competitive films increase demand for their products?
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?
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?
You are a consultant to a monopolistically competitive firm. The firm reports the following information about its price, marginal cost, and average total cost. P = MC, P > ATCP > MC, P = ATC Illustrating with graph(s), can the firm possibly be maximising profit? If not, what should it do to increase profit? If the firm is profit-maximising, is the firm in a long-run equilibrium? If not, what will happen to restore long-run equilibrium? PLZ EXLAIN MORE DETAILS AND WRITE IT CLEARLY THX!!!
Suppose that the restaurant industry in Honolulu is monopolistically competitive and is currently in Stage 2 equilibrium (firms currently make zero profit). The graph below shows the cost curves for a typical restaurant in this industry. (a) Draw a demand curve and an MR that is consistent with this market being in Stage 2 equilibrium. (b) Show the equilibrium price Now suppose an highly-infectious new virus comes to the island, causing demand for restanrant meals to shift in. (c) What would you expect this change in restaurant demand when the number of firms is fixed? Explain. (d) What would you expect the change in demand to do to the number of meals sold, prices and profits of firms in the long run if firms can enter and exit? What happens to the mumber of restaurants?
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
Think about firms such as the Coca Cola Company and PepsiCo who competeagainst each other in the monopolistically competitive market for soft drinks. Eachfirm produces a unique product, but each of these unique products is to some extenta substitute for the soft drinks produced by rival companies.Now imagine a situation where the firms within such a market are facing suchextreme competition that they are unable to make an operating profit. Characterisethis situation diagrammatically and explain what will happen to the market, payingparticular attention to the exit or entry of firms out of (or into) the market.
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
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.
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 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?
Suppose new firms enter a monopolistically competitive market. What is the effect of new firms entering the market from the perspective of the firms that were already in the market? Question 11Answer a. Positive supply shock b. Positive demand shock c. No effect d. Negative supply shock e. Negative demand shock