ECON MICRO
5th Edition
ISBN: 9781337000536
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 10, Problem 1.3P
To determine
Characteristics of
Concept Introduction:
Monopolistic competition is a type of competition where producers offer products that are slightly differentiated from one another.
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3-
There are many sellers of abayas and dishdashas in Muscat. Each abaya and dishdasha seller makes their product slightly different from others. There is free entry and exit into this market. Which market structure is this situation referring to?
a.
Monopolistic Competition
b.
Perfect Competition
c.
Oligopoly
d.
Monopoly
21-
A town in India has three Milk producing companies. The owners of these milk companies make decisions together about when to raise and lower milk prices. It would be difficult for another milk company to enter this market. Which market structure best describes this market?
a.
Perfect competition
b.
Oligopoly
c.
Monopolistic competition
d.
Monopoly
1.Microsoft is one of the leading software companies. Prior to 2000, Microsoft’s share of the market for personal computer operating systems stood above 80 per cent. However, since the twenty-first century Microsoft’s market share has steadily declined to 40 per cent. This is due to the rise in competing software producers such as Apple macOS (10%), Google's Android OS (35%), Linux Operating System (35%), and Apple iOS (5%). The market share of each company is provided in parentheses. Google and Linux have decided that it would be in their best interest to work together to serve the market. This is not common knowledge to the person’s outside of the companies.
i. Draw how equilibrium price and quantity are determined in this industry. Hi does this refer to the monopoly market structure diagrams?
2. Allsmart’s demand curve is given by Q=10-P for its dishwashers. The marginal and average cost is $3 per dishwasher produced. Complete the following table. Photo below concerns…
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- Question 3: a. Explain the difference between and the economic relevance of fixed costs, sunk costs, variable costs, and marginal costs by using specific examples from everyday administrative activities. b. By using specific product markets briefly discuss the significant difference among the following market structures: (i) perfect competition, (ii) monopoly, (iii) monopolistic competition, and (iv) oligopoly. c. Why are externalities, public goods, and information asymmetry major problems in the market? Discuss.arrow_forwardOnly typed answer 1. Why do oligopolies exist? A. A small number of firms have established barriers to entry using economies of scale, patents, and sheer size to prevent other firms from challenging them. B. The oligopolistic firms are created, run, and supported by the government. C. The members of an oligopolistic market are producing in the upward sloping range of their long run average cost curves.arrow_forwardQUESTION 12 A firm that is the sole seller of a product without close substitutes is a. perfectly competitive b. monopolistically competitive c. a monopolist d. an oligopolistarrow_forward
- (Monopolistic Competition Market) The main characteristic of the monopolistic competition market structure is product differentiation. 3A. Explain what is meant by product differentiation and what does it look like? 3B. Explain why the company does this and how? Thank you for the help Bartleby!arrow_forward2b. Firm’s market power: an explanation for a firm’s pricing behavior. The economists contribute an argument to the theory of the firm that: firms in different markets, and even different firms within the same market, are likely to have different degree of market power. And in turn, a firm’s market power is believed to help its capacity to charge relatively high prices compared to their rivals without losing all of its customers. What is your understanding of the concept of market power? What are the factors determining a firm’s market power? What is the extent of a firm’s market power in perfectly competitive markets versus monopolistically competitive markets? Observe an online market platform and search for a real-life example of a firm in a competitive market charging different price levels from its rivals (the competitors who are selling similar products). Give an explanation of the relevance of the market power to the firm’ pricing decision.arrow_forwardQuestion 13.13. If monopolistically competitive firms in an industry are making an economic profit, then new firms will enter the industry and the product demand facing existing firms will increase. become less elastic. not be affected. decrease.arrow_forward
- Question 1a. How is monopolistic competition like monopoly, perfect competition andoligopoly? b. Give two examples of price discrimination. In each case, explain why themonopolist chooses to follow this business strategy c. Why does price equal marginal revenue for the perfectly competitive firm?What is the relationship to the demand curve for the firm?arrow_forwardQuestion 37 A monopolistically competitive firm cannot make strictly negative profits in the long run because The firm’s optimal quantity is to produce where marginal revenue equals marginal cost The firm must operate at the efficient scale Either the firm exits or the exit of other firms shifts its demand curve to the right, raising profits until it makes zero profits. Exit of other firms shifts the market supply curve to the left and raises the price until firms make zero profitsarrow_forward37 - At what point should the monopolistic firm produce in order to maximize its profit in the short run? a) MR=AVC B) MC=MR C) MC=AVC D) MR=AC TO) MC=ACarrow_forward
- 23- Which of the following market types has all firms selling products so identical that buyers do not care from which firm they buy? a. oligopoly b. monopoly c. perfect competition d. monopolistic competitionarrow_forward13. How can you calculate Total Revenue? What is the formula?arrow_forward5- Choose the extremely competitive market structure from the following. a. Monopoly b. Monopolistic competition c. Oligopoly d. Perfect competitionarrow_forward
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