Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Question
Chapter 9, Problem 19SQ
To determine
The price charged by the
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Students have asked these similar questions
The major difference between a monopolistic competition and monopoly is,
a.
monopoly is a price taker and a firm in monopolistic competition is a price maker.
b.
there are barriers to entry and exit in monopolistic competition and freedom to enter and exit in monopoly.
c.
only a monopoly can earn an abnormal profit in the long run.
d.
None of these.
Do you expect that an increase in the price of a product generates a larger decrease in quantity demanded for a monopolistically competitive firm than it would for a monopoly?
a/ yes; consumers will buy from competitors offering lower priced substitutes
b/ no; conditions of imperfect competition means demand is constant
c/ no; a monopolistic competitor perceives demand as a price maker
d/ yes; but temporarily because price increases only create a short-run decline
Which of the following statements about a monopoly is true?
(a) The monopolist has a flat demand curve because of high barriers to entry.
(b) For a monopolistic firm, profit will be maximised where price = marginal
revenue.
(c) In the long run, a monopolist can earn only normal profits.
(d) Price, in the long run, is not usually equal to the minimum average total
cost.
Chapter 9 Solutions
Economics For Today
Ch. 9.1 - Prob. 1GECh. 9.1 - Prob. 2GECh. 9.2 - Prob. 1YTECh. 9.4 - Prob. 1YTECh. 9 - Prob. 1SQPCh. 9 - Prob. 2SQPCh. 9 - Prob. 3SQPCh. 9 - Prob. 4SQPCh. 9 - Prob. 5SQPCh. 9 - Prob. 6SQP
Ch. 9 - Prob. 7SQPCh. 9 - Prob. 8SQPCh. 9 - Prob. 9SQPCh. 9 - Prob. 10SQPCh. 9 - Prob. 11SQPCh. 9 - Prob. 12SQPCh. 9 - Prob. 13SQPCh. 9 - Prob. 1SQCh. 9 - Prob. 2SQCh. 9 - Prob. 3SQCh. 9 - Prob. 4SQCh. 9 - Prob. 5SQCh. 9 - Prob. 6SQCh. 9 - Prob. 7SQCh. 9 - Prob. 8SQCh. 9 - Prob. 9SQCh. 9 - Prob. 10SQCh. 9 - Prob. 11SQCh. 9 - Prob. 12SQCh. 9 - Prob. 13SQCh. 9 - Prob. 14SQCh. 9 - Prob. 15SQCh. 9 - Prob. 16SQCh. 9 - Prob. 17SQCh. 9 - Prob. 18SQCh. 9 - Prob. 19SQCh. 9 - Prob. 20SQ
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- Question: answer the images in a short run monopolist will shut down when? a natural monoploy is most likely to occur in the market when?arrow_forwardGaynor is the only manufacturer of gas pumps that automatically refill. Gaynor can earn a profit on the sale of these gas pumps a. in the short run but not in the long run because new firms will enter the industry in the long run. b. in the long run but not the short run because the monopolist will face competition in the short run. c. only in the long run because government regulations prevent monopolists from earning profits in the short run. d. in the long and short run because entry into the industry by new firms is blocked.arrow_forwardWhat would happen to the following if there is anincrease in marginal cost? (a) The price that the monopolist can charge. (b) The quantity that the monopolist will produce. (c) The quantity that the perfectly competitive industry will produce. (d) The maximum profit of the perfectly competitive industry. .arrow_forward
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- What does monopolistic competition have in common with monopoly? a.barriers to entry b.the ability to collude with respect to price c.a downward-sloping demand curve d.a large number of firms which one is the answer?arrow_forwardI need help with number 1 because I have no clue which one is correct. I need some sort of explanation 1. Which of the following is true of the model of monopolistic competition? a. Barriers to entry enable firms to enjoy positive profits in the long run. b. The number of firms declines over time as a result of economies of scale. c. The monopolistically competitive firms enjoy a greater market power than a monopolist. d. Firms tend to locate near each other in order to minimize total travel costs for consumers. e. The firms end up charging same prices for their individual products. 2. Which of the following is an example of price competition? a. Nike signs LeBron James to a $90 million contract for endorsements. b. Kellogg's puts the images of Snap, Crackle, and Pop on boxes of Cocoa Krispies, linking the cereal with Rice Krispies. c. McDonald's introduces new garden McSalads. d.…arrow_forwardQ: Does a monopolist firm always earn abnormal profit? Yes/No. Explainy your answer theoretically and graphically.arrow_forward
- WORD LIMIT – MAXIMUM 500 WORDS Using the Monopoly model, show using diagrams how a monopolist may sustain abnormal profits for the indefinite future. Should the competition commission litigate against firms who have a dominant market position? In your answer, make sure you use a diagram, list the assumptions for the model, and give examples of real world markets that may be dominated by monopolists. The diagram used should be your own and not taken from another source.arrow_forwardDraw the MR, MC, AVC, ATC, Demand, supply, MC and MR for the following situations. For each of these situations show the total revenue, total cost area, and shade the profit or loss area, and if the situation is a shut down state why it should shutdown. a.A monopolist showing a profitb.A monopolist showing a loss but not a shut-downc.A monopolist at a break-even pointd.Difference between a monopolist and a perfectly competitive firm for a profit situation on the same graph space.arrow_forwardif a monopolistic firm takes over a perfectly competitive market we would expect to see the market price of the good to? fall because demand is perfectly elastic rise and quantity sold to fall fall as the monopolist tries to increase sales rise and quantity sold to increasearrow_forward
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