4) Use the figure below to answer the following questions. Price and cost (dollars per unit) 80 MC 60 40 ATC 20 MR: 20 40 60 80 100 Quantity (units per week) Figure 2 a) Refer to Figure 2 If this firm is in monopolistic competition, what is its output? b) Refer to Figure 2 If this firm is in monopolistic competition, what is the price it will charge? c) Refer to Figure 2. What is the firm profit situation? What time frame equilibrium is the firm? d) Refer to Figure 2. If this firm in monopolistic competition is in short-run equilibrium, and the firm making profit what will happen in the long run to the firm profit? explain

4) Use the figure below to answer the following questions. Price and cost (dollars per unit) 80 MC 60 40 ATC 20 MR: 20 40 60 80 100 Quantity (units per week) Figure 2 a) Refer to Figure 2 If this firm is in monopolistic competition, what is its output? b) Refer to Figure 2 If this firm is in monopolistic competition, what is the price it will charge? c) Refer to Figure 2. What is the firm profit situation? What time frame equilibrium is the firm? d) Refer to Figure 2. If this firm in monopolistic competition is in short-run equilibrium, and the firm making profit what will happen in the long run to the firm profit? explain

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Monopoly

Section: Chapter Questions

Problem 1PA

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2. Entry or exit in the long run Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC). Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss. 500 450 Monopolistically Competitive Outcome 400 350 300 Profit or Loss A ATC 250 200 150 MC 100 50 MR Demand 50 100 150 200 250 300 350 400 450 500 QUANTITY (Bikes) Given the profit-maximizing choice of output and price, the shop is earning profit, which means there are shops in the industry than in long-run equilibrium. PRICE (Dollars per bike)
The graph below shows cost and revenue curves for a monopolistically competitive firm. Price $2.00 $1.75 $1.50 $1.25 $1.00 $0.75 $0.50 $0.25 0 20 40 60 MR Quantity It will charge a price of $ ATC MC D 80 100 120 140 160 This monopolist's profit-maximizing output level is on the x-axis.] units. [Watch for the scale
. Competitors in monopolistic competition have full control over- (A) The price of their product (B) Product quality (C) The shape of the market demand curve (D) The elasticity of product substitutions 8AM
Quèstion 13 Figure#5 $10 MC ATC $7 $6 $5 $4 $3 $2 $1 MR $0 0 10 20 30 40 50 60 70 80 90 100 Quantity Refer to Figure#5. This figure depicts a situation in a monopolistically competitive market. In long run, how much output will the monopolistic competition produce and will charge at what price? Price 9876 5A32
QUESTION 11 Price and costs (dollars per calculator) 20 000 16 12 8 0 100 MC ATC O MR 200 300 400 500 600 Quantity (calculators per day) The figure above shows the situation facing Smart Digit, Inc., a firm in monopolistic competition that produces calculators. What quantity does the firm produce? more than 300 calculators per day and less than 400 calculators per day 300 calculators per day 400 calculators per day 200 calculators per day
(a) What is meant by consumer surplus and producer surplus? Using a diagram show that there is a deadweight loss to society from monopoly in terms of total surplus. (b) In what ways is a monopolistically competitive firm likely to be less efficient than one under perfect competition?
9) The Big Top Circus wants to add a death-defying trapeze act to its show. This graph shows the demand and costs for the Flying Squirrels. They are one act of many in a monopolistically competitive market. (See the following diagram.) 10 8.5 5 (Market demand) 250 300 a) At the profit maximizing output level, the firm's profit is: A) $1,200. B) $1,050. C) $750. D) $375. Marginal revenue for firm d) In the long-run we expect the firm to:: Long-run average cost Long-run marginal cost b) In the long-run we expect: A) more firms to enter the market. C) the average cost of production to decrease. B) the firm's demand curve to shift to the right. D) the price of the good to increase. c) At the profit maximizing output level, the is earning a A) positive economic profit and more firms are expected to enter the market. Q B) zero economic profit and no firms are expected to enter the market. C) negative economic profit and more firms are expected to leave the market. D) There is not sufficient…
(a) Explain why a monopolistically competitive firm’s profit maximization occurs at the output level when marginal revenue for the firm is equal to its marginal cost. Use a graph to prove your point for a monopolistically competitive firm. (b) What can a monopolistically competitive firm do to try to maintain economic profits?
Exercise A.8. The graph below corresponds to a company operating in a market under conditions of monopolistic competition: € 5 4 3 2 1 CM CMe 20 40 60 90 100 120 Quantity of output a) What is the level of production maximizes the short-term profits of this company? b) What price will the company charge to maximize its profits? c) What benefits does the company obtain in the short term? d) How would advertising affect the curves shown in the graph? Would profits necessarily increase? Reason your answers.
PRICE (Dolars per bike) 2. How short-run profit or losses induce entry or exit Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal-revenue (MR) curve, marginal-cost (MC) curve, and average-total-cost (ATC) curve. Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss. Now consider the long run in which bike manufacturers are free to enter and exit the market. Show the possible effect of this free entry and exit by shifting the demand curve for a typical individual producer of bikes on the following graph. 500 400 400 ATC 300 250 200 150 100 Mo Demand 0 ° 50 100 150 200 200 300 350 450 500 QUANTITY (Bikes) Monopolistically Competitive Outcome Profit or Loss Given the…
ICE (Dollars per scooter) 3. How short-run profit or losses induce entry or exit Citrus Scooters is a company that manufactures electric scooters in a monopolistically competitive market. The following graph shows the demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC) for Citrus. Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss 500 450 400 360 200 250 200 150 400 50 MC- ATC MR Demand 150 200 250 300 360 400 450 500 QUANTITY (Scooters) + Monopolistically Competitive Outcome Profit or Loss (?) Given the profit-maximizing choice of output and price, Citrus Scooters is earning sellers in the industry relative to the long-run equilibrium amount. Now consider the long run in which scooter manufacturers are free to enter and…
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.