Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter 10, Problem 3SQP
(a):
To determine
Long-run
(b):
To determine
Long-run equilibrium output in the economy.
(c):
To determine
The quantity at which the LRAC is at its minimum.
(d):
To determine
Long-run equilibrium price comparison with the marginal cost of producing the output.
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Compare and contrast the way that monopolistic competitors set price with the way that perfectly competitive firms set price. Also, compare and contrast the short and long run equilibrium in perfect competition and monopolistic competition.
A firm in monopolistic competition produces an output level Q1 = 100 where marginal revenue is equal to marginal cost. At this output level, the price is P1 = $75 and the average total cost is ATC1 = $25.
1. Draw the graph for the monopolistically competitive firm in the short-run equilibrium using the numbers provided above (include ATC, D, MC, and MR curves). Label everything!
2. At this output of Q1 = 100, calculate: total revenue (TR), total cost (TC), and profit in the short-run. Show your work (formulas and calculations).
3. On the graph, show the markup and the excess capacity for this firm.
4. In the long run, what will happen to the profit earned by the firm?
5. Draw the graph for the monopolistically competitive firm in long-run equilibrium.
What is the first item to identify when determining the short-run equilibrium for a monopolistically competitive firm?
a. the total profits
b. the total revenue
C. the total costs
d. the profit-maximizing level of output
Chapter 10 Solutions
Micro Economics For Today
Ch. 10.1 - Prob. 1YTECh. 10.5 - Prob. 1GECh. 10.6 - Prob. 1YTECh. 10 - Prob. 1SQPCh. 10 - Prob. 2SQPCh. 10 - Prob. 3SQPCh. 10 - Prob. 4SQPCh. 10 - Prob. 5SQPCh. 10 - Prob. 6SQPCh. 10 - Prob. 7SQP
Ch. 10 - Prob. 8SQPCh. 10 - Prob. 9SQPCh. 10 - Prob. 10SQPCh. 10 - Prob. 11SQPCh. 10 - Prob. 12SQPCh. 10 - Prob. 13SQPCh. 10 - Prob. 1SQCh. 10 - Prob. 2SQCh. 10 - Prob. 3SQCh. 10 - Prob. 4SQCh. 10 - Prob. 5SQCh. 10 - Prob. 6SQCh. 10 - Prob. 7SQCh. 10 - Prob. 8SQCh. 10 - Prob. 9SQCh. 10 - An oligopoly is a market structure in which a. one...Ch. 10 - Prob. 11SQCh. 10 - A common characteristic of oligopolies is a....Ch. 10 - Prob. 13SQCh. 10 - Prob. 14SQCh. 10 - Prob. 15SQCh. 10 - Prob. 16SQCh. 10 - Prob. 17SQCh. 10 - Prob. 18SQCh. 10 - Prob. 19SQCh. 10 - The kinked oligopoly demand curve is a result of...
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