MyLab Economics with Pearson eText -- Access Card -- for Microeconomics
6th Edition
ISBN: 9780134125886
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 13, Problem 13.4.1RQ
To determine
The difference between the long-run equilibrium in
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The following graph represents a monopolistically competitive firm in long-run equilibrium.
Place the black point (cross sign) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive
company. Next, place the grey star on the graph to indicate the point where the LRAC reaches a minimum.
PRICE PER UNIT (Dollars)
500
450
400
350
300
250
200
150
100
50
MC
0
0
50
LRAC
MR
Demand
100 150 200 250 300 350 400 450 500
QUANTITY (Units)
Monopolistically Competitive Outcome
Minimum of the LRAC
The long-run equilibrium price is $
(Hint: Use the graph to find the numeric value of the price at equilibrium.)
The long-run equilibrium quantity is
units.
The LRAC curve is at its minimum at a quantity of
The long-run equilibrium price is
units.
the marginal cost of producing the equilibrium output.
?
What are the most important differences between perfectly competitive markets and monopolistically competitive markets? Give two examples of products sold in perfectly competitive markets and two examples of products sold in monopolistically competitive markets.
Suppose that a company operates in the monopolistically competitive market for denim jackets. The following graph shows the demand curve,
marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve for the firm.
Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Nex
place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with that cost.
(?)
PRICE (Dollars per jacket)
100
90
80
70
60
50
ATC
20
40
30
20
10
10
MC
MR
Demand
0
+
+
0
10
20
30 40 50 60 70
80
90 100
QUANTITY (Thousands of jackets)
Mon Comp Outcome
Min Unit Cost
at the optimal
the efficient scale.
Because this market is monopolistically competitive, you can tell that it is in long-run equilibrium by the fact that P= ATC
quantity for each firm. Further, the quantity the firm produces in long-run equilibrium is
True or False: This indicates…
Chapter 13 Solutions
MyLab Economics with Pearson eText -- Access Card -- for Microeconomics
Ch. 13 - Prob. 13.1.1RQCh. 13 - Prob. 13.1.2RQCh. 13 - Prob. 13.1.3RQCh. 13 - Prob. 13.1.4PACh. 13 - Prob. 13.1.5PACh. 13 - Prob. 13.1.6PACh. 13 - Prob. 13.1.7PACh. 13 - Prob. 13.1.8PACh. 13 - Prob. 13.1.9PACh. 13 - Prob. 13.1.10PA
Ch. 13 - Prob. 13.2.1RQCh. 13 - Prob. 13.2.2RQCh. 13 - Prob. 13.2.3RQCh. 13 - Prob. 13.2.4PACh. 13 - Prob. 13.2.5PACh. 13 - Prob. 13.2.6PACh. 13 - Prob. 13.2.7PACh. 13 - Prob. 13.2.8PACh. 13 - Prob. 13.2.9PACh. 13 - Prob. 13.3.1RQCh. 13 - Prob. 13.3.2RQCh. 13 - Prob. 13.3.3RQCh. 13 - Prob. 13.3.4RQCh. 13 - Prob. 13.3.5PACh. 13 - Prob. 13.3.6PACh. 13 - Prob. 13.3.7PACh. 13 - Prob. 13.3.8PACh. 13 - Prob. 13.3.9PACh. 13 - Prob. 13.3.10PACh. 13 - Prob. 13.3.11PACh. 13 - Prob. 13.3.12PACh. 13 - Prob. 13.4.1RQCh. 13 - Prob. 13.4.2RQCh. 13 - Prob. 13.4.3RQCh. 13 - Prob. 13.4.4RQCh. 13 - Prob. 13.4.5PACh. 13 - Prob. 13.4.6PACh. 13 - Prob. 13.4.7PACh. 13 - Prob. 13.4.8PACh. 13 - Prob. 13.4.9PACh. 13 - Prob. 13.5.1RQCh. 13 - Prob. 13.5.2RQCh. 13 - Prob. 13.5.3PACh. 13 - Prob. 13.5.4PACh. 13 - Prob. 13.5.5PACh. 13 - Prob. 13.5.6PACh. 13 - Prob. 13.5.7PACh. 13 - Prob. 13.6.1RQCh. 13 - Prob. 13.6.2RQCh. 13 - Prob. 13.6.3PACh. 13 - Prob. 13.6.4PACh. 13 - Prob. 13.6.5PACh. 13 - Prob. 13.6.6PA
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