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 rise
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- DE Quantity MC MR ATC Demand The graph above represents a firm in a monopolistically competitive market. Which of the following is true? The firm's profit-maximizing quantity is E. The firm is making a profit of (A - B) x D. The firm is making zero economic profits. The firm is making a loss of (A - B) x D.The graph depicts a monopolistically competitive firm. Dollars ($) 90 80 65 55 50 MC 0 ATC MR 10 20 35 45 50 Quantity of Output (Units) Refer to the above graph. This monopolistically competitive firm is: making economic profit in the long run. making economic profit in the short run making a loss in the long run. making a loss in the short run.The graph shows the demand curve, marginal revenue curve, and marginal cost curve of Java Time, Inc., a producer of espresso machines in monopolistic competition. Draw a point at the firm's the profit-maximizing price and quantity. Label it 1. Draw an arrow that shows Java Time's markup. Draw the average total cost curve such that Java Time does not have excess capacity. Label it. Draw a point at the intersection of the ATC curve and the MC curve. Label it 2. Java Time's markup is $a machine. 240 220- 200- 180- 160- 140 120- 100- 80- 60- 40- 20- 04 0 Price and cost (dollars per machine) MC 100 200 300 400 Quantity (espresso machines per week) D MR 500
- II. 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? 133.33The monopolistically competitive firm represented in the graph is in: $ $11.40 $10.20 $7.50 0 520 630 MC ATC MR Firm's Demand Quantity Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a long-run equilibrium since it is earning zero profit. b short-run equilibrium since it is earning zero profit. C short-run equilibrium, but not long-run equilibrium since it is earning positive economic profit. d long-run equilibrium, but not short-run equilibrium since it is earning positive economic profit. Your answerPlease dont copy and paste the answers One of your former peers starts up a firm after graduating NYUAD. However, he didn’t take Markets so is unsure if he is behaving optimally. He’s asked you for help. His firm faces monopolistic competition, has diminishing returns to its inputs and uses a fixed input. He is producing at a quantity such that P=MC, and he makes a positive profit. a. Draw the Demand curve, MR, MC, and ATC reflecting this situation on a graph. Label the quantity, price and profit of the firm under his strategy. b. Is his strategy maximizing his profits? Explain how he would do so if not. Label the quantity, price and profit of the firm under the optimal strategy on your graph in part a. c. He asks you about what you predict might happen to his profits in the future. What do you expect will happen to profits in this industry as we go to long run and why? What is the key assumption of monopolistic competition that gives you your conclusion?
- Monopolistic Competition. MC AC $15 $10 demand 400 525 Quantity of Brand X Using the information in the graph above, the long-run price in this market isExplain 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.The profit-maximizing firm illustrated in Figure operates in a monopolistically competitive industry. Which of the following best explains what happens in the long run? Price 4 O MC ATC AVC D MR Quantity
- if 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 increaseThe monopolistically competitive firm represented in the graph is in: $ $11.40 $10.20 $7.50 0 520 630 MC ATC Firm's Demand MR QuantityConsider the diagram below depicting the revenue and cost conditions faced by a monopolistically competitive firm, and then answer the following questions. $40 $35 $30 MC ATC $25 $20 $17 A $15 $10 4.40 $5 3.25 MR Demand 3 4 5 7 8 9 10 Quantity Instructions: Round your answers to 2 decimal places. a. What is total revenue for this firm? $56.88 b. What is total cost for this firm? $ $58.88 c. What is this firm's economic profit? d. This firm is most likely In long-run ]equilibrlum because Instructions: In order to recelve full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For Incorrect answer(s). click the option twice to empty the box. ? P= ATC. ? P> MC. ? MR = MC. 2 the firm is experlencing normal profits. 2 the firm is experlencing economic profits. 7 demand exceeds marginal revenue. Price and costs
