Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter P3, Problem 8KC
To determine
The long run profit of the monopolistically competitive firm.
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Students have asked these similar questions
Consider perfect competition and monopolistic competition. In which market structure(s) will we see price equal to marginal cost at the last unit produced in the long-run equilibrium?
a
perfect competition
b
monopolistic competition
c
both perfect and monopolistic competition
d
neither
Consider perfect competition and monopolistic competition. In which market structure(s) will we see firms trending toward zero economic profits in the long-run equilibrium?
a
perfect competition
b
monopolistic competition
c
both perfect and monopolistic competition
d
neither
Which of these markets is most likely to be identified as monopolistic competition?
Group of answer choices
a. shoes
b. corn
c. gasoline
d. shoes, corn and gasoline are all like monopolistic competition
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- Explain the importance of advertising in monopolistically competitive industries . How does this compare with the importance of advertising in perfectly competitive industries?arrow_forwardWe know that monopolistically competitive firms prevent the efficient use of resources because at the monopolistically competitive equilibrium,Hint: "efficient" is measure relative to the perfectly competitive outcome. Question 10Answer a. MR > P. b. P > MC. c. P = MC. d. P > ATC.arrow_forward66. In monopolistically competitive markets which is the most likely type of barrier to entry: A. heavy fixed costs. B. legal barriers. C. ownership of a key resource used to produce a good or service. D. high expenditures on advertising and product promotion. E. none of the above.arrow_forward
- The market for Banh Mi in Auckland CBD consists of 6 restaurants operating in monopolistic competition. Suppose that these firms face monthly fixed costs of $5,000 and marginal costs of $3. a) Draw the average cost and marginal cost curves for a representative firm. b) If the short run market price is $6 and each firm sells 2000 units per month, what will occur in the long run? Explain and show on a graph. c) Suppose that Banh Mi become more popular as a lunch option, and market demand increases. Explain the short run and long run effects on the market, including price, firm-level quantity and number of firms. Use graphs to explain your answer.arrow_forwardA. How does the demand curve faced by the firm in monopolistically competitive market differ from the demand curve faced by a firm participating in a purely competitive market? b. How does that impact how the firm sets its price and the quantity the firm produces?arrow_forwardWhat differentiates monopolistic competition from a monopoly?a A seller operating in a monopolistically competitive market no longar facet a downward-sloping demand curve,b. There are more seller,c. Firms can enter the market selling similar but not identical productd. (b) and (e)e. all of the abovearrow_forward
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