for a monopolistic firm, its demands is p=200- 0.25Q while MR =200-0.5Q if its MC=20 how much it should produce to maximize its profit? for a monopolistic firm, its demands is p=200- 0.25Q while MR =200-0.5Q if its MC=20 how much the firm should charge? for a monopolistic firm, its demands is p=200-
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- a) Can the threat of a price war deter entry by potential competitors? What actions might a firm take to make this threat credible? b)Why is the firm’s demand curve flatter than the total market demand curve in monopolistic competition? Suppose a monopolistically competitive firm is making a profit in the short run. What will happen to its demand curve in the long run?Monopolistic competition creates inefficiency because of the Price markups and excess capacity. The graph depicts the situation $100 for a hypothetical monopolistically competitive firm. The 90 curves included in the graph are demand (D), marginal 80 revenue (MR), average total cost (ATC), and marginal cost ATC (MC). Use the graph to find the requested values. 70 60 What is the size of the markup on the price? 50 40 markup: $ 30 What is the size of the excess capacity? 20 MC MR 10 units excess capacity: 20 30 40 50 60 70 80 90 10 100 QuantityMonopolistically competitive firms in a market face the following demand and costs, where P is price, Q is quantity, and N is the number of firms in the market 200 Demand: Q = - P N Total Cost: TC = 8+Q² a. How many units will a firm produce and what price will it charge to maximize profit? b. How much profit will the firm earn? c. How many firms will be in the market in the long run?
- Inverse demand for aglets (the plastic wrap on the end of the shoelaces) is given by the expression: P=1-Q/20,000. Further suppose the the marginal cost of producing aglets is constant at $0.01. What are the equilibrium price and quantity in a competitive market? What are the equilibrium price and quantity as well as profit in monopolistic market? What is the deadweight loss?The diagram above represents a monopolistically competitive firm. Answer the questions below. Is this firm operating in the short-run or long-run? How do you know? Calculate this firm’s accounting profit. From the diagram, what is the productively efficient output for this firm? From the diagram, economies of scale are maximized at which output level? Explain. From the diagram, what is the allocatively efficient output for this firm? Explain.How is the perceived demand curve for a monopolistically competitive firm different from the perceived demand curve for a monopoly or a perfectly competitive firm? Why?
- Suppose a company creates its own differentiated type of sneaker and is thus considered a monopolistically competitive firm. This firm has a constant marginal cost curve. For each unit of output that the monopolistically competitive firm produces, it costs an additional $50. The firm's marginal revenue curve is MR=200−30Q, where Q is the quantity produced. The firm's perceived demand curve is P=200−15Q. What is the monopolistically competitive firm's profit-maximizing output and price?I know that profit maximization for both a competitive and monopolistic market is MC=MR, however MR=P is applicable only in a competitive market and this is a monopoly. How do I solve this?Suppose that a typical firm in a monopolistically competitive industry faces a demand curve given by: q = 60 − (1/2)p, where q is quantity sold per week. The firm’s marginal cost curve is given by: MC = 60. 1. How much will the firm produce in the short run? 2. What price will it charge? 3. Draw the firm’s demand, marginal revenue, and marginal cost curves. Does this solution represent a long-run equilibrium? Why or why not? Sometimes oligopolies in the same industry are very different in size. Suppose we have a duopoly where one firm (Firm A) is large and the other firm (Firm B) is small, as shown in the prisoner’s dilemma box in Table 5.Firm B colludes with Firm AFirm B cheats by selling more outputFirm A colludes with Firm BA gets $1,000, B gets $100A gets $800, B gets $200Firm A cheats by selling more outputA gets $1,050, B gets $50A gets $500, B gets $20Assuming that the payoffs are known to both firms, what is the likely outcome in this case?
- The graph shows the cost curves, demand curve, and marginal revenue curve of a firm in monopolistic competition. If this firm is maximizing profits, what is the firm's economic profit in millions of dollars? [NOTE: The quantities shown in the graph are in millions. Please enter the number of millions of dollars of economic profit in the statement below.] The firm's economic profit is $ million. 2207 200- 180- 160- 140- 120- 100- 80- 60- 40- 20- Price and cost (dollars per pair) 10+ 0.0 MC MR ATC D 0.5 1.0 1.5 2.0 2.5 Quantity (millions of pairs of Uggs per year) 3.0Which type of a firm, monopolistically competitive or a monopoly, will have a greater incentive to advertise its product? Please give an explanation.Answer the question: Aside from advertising, how can monopolistically competitive firms increase demand for their products? What effect would doing this have on the elasticity of the firm’s perceived demand curve? Explain your answers.