1. A distinguishing characteristic of monopolistically competitive market is A. price discrimination B. differentiated products C. having long-run economic profits D. having short-run economic losses
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1. A distinguishing characteristic of
A.
B.
differentiated products
C.
having long-run economic profits
D.
having short-run economic losses
Step by step
Solved in 4 steps
- How does a monopolistic competitor choose its profit-maximizing quantity of output and price?Part II | The graph below shows a monopolistically competitive firm in the short run. Price and Cost 8 9 8 20 0 100 MR 200 300 400 500 600 700 800 Output MC 9. What is the firm's profit-maximizing price and quantity? 10. How much profit does that firm make at that price and quantity? 900 ATC -d-pII. The figure is drawn for a monopolistically competitive firm. PRICE 140 123.33 90 56.67 100 133.33 QUANTITY MC ATC Demand MR Refer to the figure above and explain: A). In order to maximize its profit, how many units the firm will choose to produce? 100 B). When the firm is maximizing its profit, the markup over marginal cost amounts to 50 C). The firm's maximum profit is D). Efficient scale is reached beyond which level of units? 133.33
- Assume a monopolistically competitive firm encounters a decrease in average variable cost at all output levels.We would expect: a. The price to rise and output to rise b. The price to fall and output to fall c. The price to rise and output to fall d. The price to fall and output to riseA. 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?Draw a diagram of the long-run equilibrium in a monopolistically competitive market. How is price related to average total cost? How is price related to average total cost? How is price related to marginal cost?
- Explain your reasons 1.If demand is elastic, the difference between the monopolistic price and the competitive market price would be greater compared to when the elasticity is low. 2. In 2011, heavy rain and cold weather destroyed 10 percent of the world coffee products. Therefore, it is expected that people consume less coffee.What is true of a monopolistically competitivemarket in long-run equilibrium?a. Price is greater than marginal cost.b. Price is equal to marginal revenue.c. Firms make positive economic profits.d. Firms produce at the minimum of average totalcost.The demand curve for a monopolistically competitive firm is downward sloping because Group of answer choices a. it is easy for firms to enter or exit the market b. there are a large number of firms c. the marginal cost rises as output produced increases d. the product is produced by using scarce resources e. the products produced by different firms are not identical
- A photocopy shop in a monopolistically competitive market could daily sell 17,600 copies at a price of 4 cents, or it could sell 26,400 copies at a price of 3 cents. a. The marginal revenue associated with this range of the business's demand curve is____ cent(s). b. Draw the relevant range of this business's demand curve and identify a point on its marginal revenue curve.Cost and revenue The graph presents the short-run costs and revenue for a monopolistically competitive firm. Use this information to $800 Marginal cost Average total cost determine the profit-maximizing output and profit for this 750 firm in the short run. 700 650 What is the profit-maximizing output of this 600 550 monopolistically competitive firm? Round your answer to 500 the nearest whole number. 450 400 Demand units of output 350 11 300 250 What is the maximum level of profits for this 200 monopolistically competitive firm? Round your answer to 150 the nearest whole number. Marginal revenue 100 50 0 1 2 3 4 5 6 7 8 9 1011 12 13 14 15 16 17 18 19 20 350 Units of output %24Consider the diagram below depicting the revenue and cost conditions faced by a monopolistically competitive firm, and then answer the following questions. Price and costs B A 0 F G MC ATC H E Demand MR Quantity Suppose the firm achieves productive efficiency. a. The resulting price-quantity combination would be illustrated by point (Click to select) ✰ b. At this point, the firm experiences a short-run loss. a normal profit. an economic profit.
