Represent the quantity output produced and price charged per unit by a monopolistic competitor graphically.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 11, Problem 1VQP

To determine

Represent the quantity output produced and price charged per unit by a monopolistic competitor graphically.

Expert Solution & Answer

Explanation of Solution

The monopolistic market is a blend of monopoly and perfect competition. In the short run, the monopolistic market sets its price and quantity as a monopoly. Shown in figure 1 below.

Microeconomics (with Digital Assets, 2 terms (12 months) Printed Access Card) (MindTap Course List), Chapter 11, Problem 1VQP , additional homework tip 1

According to the above figure, market will produce at which MC equal MR or at the negative region of Ac, where price is greater than the marginal cost. As a monopoly, the monopolist gets a supernormal profit in the initial time. Attracted to this profit, other firms enter the market. And in the long run, it only attains a normal profit. Shown below in figure 2.

Microeconomics (with Digital Assets, 2 terms (12 months) Printed Access Card) (MindTap Course List), Chapter 11, Problem 1VQP , additional homework tip 2

The firms are attracted to the market, and they share the profit in the market that exists early. Then, the price of a good will decline, and it becomes equal to ATC. Then, the supernormal profit in the short run becomes normal profit in the long run.

Economics Concept Introduction

Monopolistic market: Monopolistic market is a market with many sellers producing differentiated products.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 2

Question

Chapter 11, Problem 1VQP

To determine

Represent the quantity output produced and price charged per unit by a monopolistic competitor graphically.

Expert Solution & Answer

Explanation of Solution

The monopolistic market is a blend of monopoly and perfect competition. In the short run, the monopolistic market sets its price and quantity as a monopoly. Shown in figure 1 below.

Microeconomics (with Digital Assets, 2 terms (12 months) Printed Access Card) (MindTap Course List), Chapter 11, Problem 1VQP , additional homework tip 1

According to the above figure, market will produce at which MC equal MR or at the negative region of Ac, where price is greater than the marginal cost. As a monopoly, the monopolist gets a supernormal profit in the initial time. Attracted to this profit, other firms enter the market. And in the long run, it only attains a normal profit. Shown below in figure 2.

Microeconomics (with Digital Assets, 2 terms (12 months) Printed Access Card) (MindTap Course List), Chapter 11, Problem 1VQP , additional homework tip 2

The firms are attracted to the market, and they share the profit in the market that exists early. Then, the price of a good will decline, and it becomes equal to ATC. Then, the supernormal profit in the short run becomes normal profit in the long run.

Economics Concept Introduction

Monopolistic market: Monopolistic market is a market with many sellers producing differentiated products.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 11, Problem 1VQP

To determine

Represent the quantity output produced and price charged per unit by a monopolistic competitor graphically.

Expert Solution & Answer

Explanation of Solution

The monopolistic market is a blend of monopoly and perfect competition. In the short run, the monopolistic market sets its price and quantity as a monopoly. Shown in figure 1 below.

Microeconomics (with Digital Assets, 2 terms (12 months) Printed Access Card) (MindTap Course List), Chapter 11, Problem 1VQP , additional homework tip 1

According to the above figure, market will produce at which MC equal MR or at the negative region of Ac, where price is greater than the marginal cost. As a monopoly, the monopolist gets a supernormal profit in the initial time. Attracted to this profit, other firms enter the market. And in the long run, it only attains a normal profit. Shown below in figure 2.

Microeconomics (with Digital Assets, 2 terms (12 months) Printed Access Card) (MindTap Course List), Chapter 11, Problem 1VQP , additional homework tip 2

The firms are attracted to the market, and they share the profit in the market that exists early. Then, the price of a good will decline, and it becomes equal to ATC. Then, the supernormal profit in the short run becomes normal profit in the long run.

Economics Concept Introduction

Monopolistic market: Monopolistic market is a market with many sellers producing differentiated products.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 11, Problem 1VQP

To determine

Represent the quantity output produced and price charged per unit by a monopolistic competitor graphically.

Expert Solution & Answer

Explanation of Solution

The monopolistic market is a blend of monopoly and perfect competition. In the short run, the monopolistic market sets its price and quantity as a monopoly. Shown in figure 1 below.

Microeconomics (with Digital Assets, 2 terms (12 months) Printed Access Card) (MindTap Course List), Chapter 11, Problem 1VQP , additional homework tip 1

According to the above figure, market will produce at which MC equal MR or at the negative region of Ac, where price is greater than the marginal cost. As a monopoly, the monopolist gets a supernormal profit in the initial time. Attracted to this profit, other firms enter the market. And in the long run, it only attains a normal profit. Shown below in figure 2.

Microeconomics (with Digital Assets, 2 terms (12 months) Printed Access Card) (MindTap Course List), Chapter 11, Problem 1VQP , additional homework tip 2

The firms are attracted to the market, and they share the profit in the market that exists early. Then, the price of a good will decline, and it becomes equal to ATC. Then, the supernormal profit in the short run becomes normal profit in the long run.

Economics Concept Introduction

Monopolistic market: Monopolistic market is a market with many sellers producing differentiated products.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 11, Problem 1VQP

To determine

Represent the quantity output produced and price charged per unit by a monopolistic competitor graphically.

Expert Solution & Answer

Explanation of Solution

The monopolistic market is a blend of monopoly and perfect competition. In the short run, the monopolistic market sets its price and quantity as a monopoly. Shown in figure 1 below.

Microeconomics (with Digital Assets, 2 terms (12 months) Printed Access Card) (MindTap Course List), Chapter 11, Problem 1VQP , additional homework tip 1

According to the above figure, market will produce at which MC equal MR or at the negative region of Ac, where price is greater than the marginal cost. As a monopoly, the monopolist gets a supernormal profit in the initial time. Attracted to this profit, other firms enter the market. And in the long run, it only attains a normal profit. Shown below in figure 2.

Microeconomics (with Digital Assets, 2 terms (12 months) Printed Access Card) (MindTap Course List), Chapter 11, Problem 1VQP , additional homework tip 2

The firms are attracted to the market, and they share the profit in the market that exists early. Then, the price of a good will decline, and it becomes equal to ATC. Then, the supernormal profit in the short run becomes normal profit in the long run.

Economics Concept Introduction

Monopolistic market: Monopolistic market is a market with many sellers producing differentiated products.

Answer 6

Chapter 11, Problem 1VQP

To determine

Represent the quantity output produced and price charged per unit by a monopolistic competitor graphically.

Expert Solution & Answer

Explanation of Solution

The monopolistic market is a blend of monopoly and perfect competition. In the short run, the monopolistic market sets its price and quantity as a monopoly. Shown in figure 1 below.

Microeconomics (with Digital Assets, 2 terms (12 months) Printed Access Card) (MindTap Course List), Chapter 11, Problem 1VQP , additional homework tip 1

According to the above figure, market will produce at which MC equal MR or at the negative region of Ac, where price is greater than the marginal cost. As a monopoly, the monopolist gets a supernormal profit in the initial time. Attracted to this profit, other firms enter the market. And in the long run, it only attains a normal profit. Shown below in figure 2.

Microeconomics (with Digital Assets, 2 terms (12 months) Printed Access Card) (MindTap Course List), Chapter 11, Problem 1VQP , additional homework tip 2

The firms are attracted to the market, and they share the profit in the market that exists early. Then, the price of a good will decline, and it becomes equal to ATC. Then, the supernormal profit in the short run becomes normal profit in the long run.

Economics Concept Introduction

Monopolistic market: Monopolistic market is a market with many sellers producing differentiated products.

Answer 7

Chapter 11, Problem 1VQP

To determine

Represent the quantity output produced and price charged per unit by a monopolistic competitor graphically.

Answer 8

Expert Solution & Answer

Explanation of Solution

The monopolistic market is a blend of monopoly and perfect competition. In the short run, the monopolistic market sets its price and quantity as a monopoly. Shown in figure 1 below.

Microeconomics (with Digital Assets, 2 terms (12 months) Printed Access Card) (MindTap Course List), Chapter 11, Problem 1VQP , additional homework tip 1

According to the above figure, market will produce at which MC equal MR or at the negative region of Ac, where price is greater than the marginal cost. As a monopoly, the monopolist gets a supernormal profit in the initial time. Attracted to this profit, other firms enter the market. And in the long run, it only attains a normal profit. Shown below in figure 2.

Microeconomics (with Digital Assets, 2 terms (12 months) Printed Access Card) (MindTap Course List), Chapter 11, Problem 1VQP , additional homework tip 2

The firms are attracted to the market, and they share the profit in the market that exists early. Then, the price of a good will decline, and it becomes equal to ATC. Then, the supernormal profit in the short run becomes normal profit in the long run.