Which of the following is always TRUE regarding a profit maximizing monopolistically competitive firm in short run equilibrium? P = MR. = MR = MC. P = ATC. MC = ATC.
Q: Popcorn Suppose you have a money income of $40, all of which you spend on Coke and popcorn. In the…
A: The budget line represents the total income that is available for the consumer on the consumption of…
Q: Question 14 For a monopsonist, the marginal factor cost is always: equal to the wage rate. less than…
A: Monopsony : A monopsony is a market condition in which there is only one buyer. Because there is…
Q: A large number of MBA applicants are given an aptitude test. Scores are normally distributed with a…
A: To find the probability that a randomly chosen MBA applicant scores 600 or above on the aptitude…
Q: Question 2 Assume the graphs shown reflect the egg market. The arrow that would best capture the…
A: The supply curve represents the quantity supplied by producers at different price levels. A movement…
Q: What will likely happen in a community where legal ceilings are imposed on residential rents?…
A: A price ceiling alludes to a type of the government-imposed breaking point or maximum passable price…
Q: 0 8 C S: S Mutiple Choice D₂ Quantity S₁ and Dyrepresent the current market supply and demand,…
A: Optimum supply and demand in the market refers to demand and supply in the market at that point of…
Q: If a profit-maximizing, competitive firm is producing a quantity at which marginal cost is between…
A: Industrial economics is the study and appraisal of business financial issues utilizing abstract…
Q: In the figure above, the decrease in the interest rate from i1 to i2 can be explained by a…
A: The price level refers to the average of the current price of items and services produced in the…
Q: Economics is the study of how society manages its a. unlimited wants and unlimited resources. b.…
A: In every economy there is a problem of scarcity. Scarcity of resources states that there are…
Q: Positive externalities a. can be internalized with a corrective tax. b. result in an efficient…
A: In economics, an externality or external cost is an indirect cost or benefit to an uninvolved 3rd…
Q: Assume that a consumer has a given budget or income of $12 and that she can buy only two goods,…
A: A budget line, also known as a budget constraint, is a graphical representation of the different…
Q: The recent Trump tax cuts are projected to increase the national debt by $24.5 trillion over the…
A: Tax rate reductions, which result in decreased tax obligations and higher profits or disposable…
Q: Which of the following types of private solutions to the externality of pollination has occurred in…
A: An externality is a cost or benefit incurred by a producer that is not financially incurred or…
Q: (a) A company production function is: Q=7K³L5 + 2(m Where Q is the quantity produced, L is the…
A: Production function: Here, K and L are inputs and m is a constant.First-order partial derivatives of…
Q: The following graph is the production possibilities curve of a nation. Drill Presses 0987654321 10…
A: PPF is the production possibility frontier. PPF shows the production possibility of two goods in an…
Q: If we assume that products Z and Y are complements and the price of Y decreases: Multiple Choice the…
A: Two goods are said to be complementary when they are used together. Two goods are said to be…
Q: Refer to the diagram. Flow 1 represents Multiple Choice O O wage, rent, interest, and profit income.…
A: This can be described as a concept that shows the flow of products and services, income, and other…
Q: Price $14 $12 $10 $8 $6 $4 $2 $0 100 $200 $400 $100 $800 200 300 400 Quantity 500 600 D 700 The…
A: The demand curve is the downward-sloping curve. The supply curve is the upward-sloping curve.The…
Q: D-66 A cash flow series is described by the following: $10,000+$250(1), where t is the number of…
A: Present Worth means the current value of the future stream of cash flows at a specific rate of…
Q: Based on the figure below, consumer surplus is $0 when price is greater than or equal to $ Price ($)…
A: The demand curve is the downward-sloping curve. The supply curve is the upward-sloping curve.The…
Q: You must decide whether to work this afternoon or study for your biology test. Your decision…
A: The decision situation provides 2 decision alternatives:WorkStudy for biology testThe decision…
Q: A monopoly that is maximizing profits operates in the ________ portion of the demand curve. A)…
A: Marginal Revenue:Marginal revenue is the additional revenue generated by selling one more unit of…
Q: perfectly competitive industry with constant costs initially operates in long-run equilibrium. When…
A: The shape of the long-run supply curve relies on the related cost of production with the expansion…
Q: Figure 9-1 The figure illustrates the market for coffee in Guatemala. Refer to Figure 9-1. In the…
A: This can be defined as a concept that shows the total demand for the products and the services in a…
Q: The total amount of producer surplus in a market is equal to A) the area between the demand curve…
A: Producer surplus is the benefit enjoyed by sellers by selling their product at market price higher…
Q: With a per-worker production function y = k¹/2, the steady-state capital stock per worker (k*) as a…
A: The steady state level of capital is the overall capital that is accumulated by the economy. It is…
Q: 1. The AIA Car Wash is a representative firm in a purely/perfectly competitive, constant-cost…
A: The market refers to a place in which producers and consumers interact to determine the equilibrium…
Q: Refer to Table 6-6. If the price of a 9-hole round of golf is $19, then Andrew will play. Select…
A: The marginal value is the additional value that the consumer gets from consumption of an additional…
Q: Amanda buys a ruby for $330 for which she was willing to pay $340. The minimum acceptable price to…
A: Consumer Surplus: The consumer surplus is the net benefit that the consumer receives by purchasing…
Q: When full employment is present in the United States: approximately 95 percent of the labor force…
A: There are four basic unemployment types studied by macroeconomists and labor economists. They are:…
Q: A firm's production function is characterized by the following production function: Q=L^(1/2)K^(1/4)…
A: Production function:Input price: Wage rate = 1, rent = 4.Return to scale: "Return to scale" refers…
Q: A consumer must divide $250 between the consumption of product X (Oranges) and product Y (Bananas).…
A: In economics the substitute good refers to those goods that can be used as a replacement for another…
Q: Using the long-run average cost curve and at least two short-run average cost curves, illustrate why…
A: The LRAC curve is a graphical illustration that shows how an organization's average production costs…
Q: An increase in the demand for gasoline O leads to an increase in consumption and potential GDP.…
A: Potential Gross Domestic Product (GDP), which means potential output or full-employment GDP, is an…
Q: (Ch8) True or False? In the figure below, the coinsurance leads to a deadweight loss of $1,600.…
A: A demand curve is a curve that will show the relationship between the price of a good and the…
Q: Which of the following is one of the Five Fundamental Questions? Multiple Choice How much should…
A: Economics is the social science that focuses on the production, distribution, and consumption of…
Q: When the economy is operating at the equilibrium level of? GDP, we know that A. total…
A: Total planned real expenditure is the total amount of planned spending on final goods and services…
Q: Sofia, a political science student, thinks that the government should in reasons, can resolve the…
A: Coordination Problem:A coordination problem refers to a situation where individuals or agents in a…
Q: Which of the following statements is true? OA. Economics is a science since the study of economics…
A: Economics refers to a type of social science that usually focuses on how the individuals,…
Q: The manager of a dessert cafe wants to determine the necessary volume of sales dollars next month to…
A: There are three categories of goods - Desserts , Liquor & Coffee Following are production and…
Q: Choose which of the following will cause the demand curve for product X to shift to the left?
A: A demand curve is a graphical representation of inverse relationship between price and quantity…
Q: Number of Employees Total Production Marginal Product of Labor Marginal Revenue Product O 1 2 3 4 O…
A: The labor demand curve is the value of marginal product curve.Marginal revenue product is calculated…
Q: 1 14. Velocity in the country of Shem is always stable. In 2002, the money supply was $200 billion…
A: The money supply in 2002 was $200 billion. The GDP price deflator is given to be four times higher…
Q: According to the graph below, which of the following are correct? Consumer Surplus ofter Lax is $18…
A: The graph after implementation of the tax is provided below.
Q: 5 ( 1 2 V W Quantity Refer to Exhibit 3-3. A shift in demand from D₁ to D₂ can NOT occur from a…
A: Demand refers to the willingness of consumer to buy a particular good at particular price level.…
Q: Which of the following statements about public goods is true? Public goods are more important…
A: Goods are tangible, physical products or commodities that are produced, purchased, and sold in the…
Q: There is a trade-off between unemployment and inflation when the aggregate a) Supply curve is…
A: Philips curve:A Philips curve is a curve that explains the relationship between inflation and…
Q: Refer to the following table to answer the following questions: Strawberries Apples Consumed Total…
A: Utility:The utility is want satisfying power of a commodity. It can be expressed in cardinal and…
Q: A Minnesota farmer buys a new tractor made in Iowa by a German company. As a result, U.S.…
A: The Gross Domestic Product (GDP) quantifies the total economic output and value of goods and…
Q: Figure 5-6 O 0.40 10 09.11 00:26 O2.48 3 Supply 100 200 E Refer to Figure 5-6. Using the midpoint…
A: Elasticities have an impact on monetary and fiscal frameworks, allowing policymakers to make changes…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 4 images
- Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with that cost. PRICE (Dolars per kit) 100 8 80 70 50 8 10 0 MO 10 ATC 20 30 O True O False MR 60 70 QUANTITY (Thousands of kits) Demand 40 80 90 100 Mon Comp Outcome Min Unit Cost Because this market is monopolistically competitive, you can tell that it is in long-run equilibrium by the fact that firm. Further, a monopolistically competitive firm's average total cost in long-run equilibrium is True or False: This indicates that there is excess capacity in the market for kits. at the optimal quantity for each the minimum average total cost.Fill in the missing data for this Monopolistically Competitive firm. Don't forget to answer the questions below the chart. I. Average Total Marginal Total Marginal Total Total Quantity Price Revenue Revenue Cost Cost Cost Profit 50 na na -50 1 48 75 2 46 45 37 4 31 135 25 15 32 38 7 175 253 /////// 8. 144 311 9 90 379 /////I/ 10 459 This firm's fixed costs are? Assuming no inflation, we would predict this firm's price to rise/fall/ stay the same. Explain your answer.c. Explain why firms operating in monopolistically competitive markets probably will not earn an economic profit in the long run
- 2. Draw a graph which depicts a short-run equilibrium that will cause exit of firms from a monopolistically competitive industry.Below is a graphical illustration of a typical firm operating in a monopolistically competitive industry. ATC 01 Refer to the graph above to answer this question. What area graphically represents a profit-maximizing firm's total revenue? Select one: O a. OP,GQ;- O b. OP, HQs. O c OP,IQ, O d. OPJQ O e. OP,FQ.What does it mean to say that: “A firm operating under perfect competition conditions is a pricetaker"?Why Can't this firm set any price it chooses? What if it operates in a monopolisticallycompetitive market, would it be able to set the price? Why? Give some real life examples tosupport your answer.2. You overheard Mr. John, the newly-hired marketing manager, saying: “I think our company shouldtake advantage of economies of scale by increasing output, thereby spreading out our overheadfixed costs”.Would you agree with this statement? If not, provide a better description for the term“economies of scale”. Explain how they may be achieved by organizations. Highlight what wouldprevent them to occur.3. For many, the principle “marginal revenue equal marginal cost" condition for profit maximizationis rather confusing.Discuss the rationale behind the condition, highlighting how different it is from the break-evenanalysis
- Draw a diagram to show the long-run equilibrium of a firm in a Monopolistically Competitive market clearly labeling the profit maximizing level of Q and P. Is P greater/less than ATC? Is P greater/less than MC? How much profit firm is earning in the long run? Also show the efficient level of outcome and explain why this firm does not produce at the efficient level.4. Maria manages a bakery that specializes in ciabatta bread (monopolistically competitive firm), and she has the following information on the bakery’s demand and costs: Ciabatta Bread Sold per Hour (Q) 0 1 2 3 4 5 6 7 8 Price (P) $6.00 5.50 5.00 4.50 4.00 3.50 3.00 2.50 2.00 Total Cost (TC) $3.00 7.00 10.00 12.50 14.50 16.00 17.00 18.50 21.00 a. To maximize profit, how many loaves of ciabatta bread should Maria sell per hour, what price should she charge, and how much profit will she make? b. What is the marginal revenue Maria receives from selling the profit-maximizing quantity of ciabatta bread? What is the marginal cost of producing the profit- maximizing quantity of ciabatta bread?Which of the following is the best example of a monopolistically competitive industry? O land-based long distance telephone service O wheat farming O the local electricity producer manufacturing of shirts O cable television
- QUESTION 12 The figure is drawn for a monopolistically competitive firm PRICE 140 123.33 90 Table b 56.67 100 133.33 QUESTION 14 QUANTITY MC MR ATC Demand Refer to Figure. If this firm's decides to produce and sell at the profit maximizing level then what will be their O a. $8,887.78. O b.$5,000.00. OC-$5,000.00. O d. 50. QUESTION 13 A perfectly competitive firm produces where O a marginal cost equals price, while a monopolist produces where marginal cost exceeds price Ob price exceeds marginal cost, while a monopolist produces where marginal cost equals price Oc marginal cost equals price, while a monopolist produces where price exceeds marginal cost O d.marginal cost exceeds price, while a monopolist produces where marginal cost equals price.Q4 "A monopolistically competitive market in which there are no entry barriers will have the identical long-run equilibrium as if the market were perfectly competitive." Is this statement correct? a. Yes, in the absence of entry barriers, firms in the monopolistically competitive market will expand until they are producing at the minimum of their LRAC curves, just as in perfect competition. b. No, because firms in the monopolistically competitive market do not produce at an output level where MC = MR, as in perfect competition, which leads to a different price and output in long-run equilibrium. c. Yes, in the absence of entry barriers, new firms enter the industry until industry price and output are identical to perfect competition. d. No, firms in the monopolistically competitive market earn economic profits in the long run because they are facing a downward-sloping demand curve, whereas in perfect competition they earn zero profits. e. No, because firms in the…Price $1.40 $1.00 $0.95 $0.85 $0.60 MC WATC D 0 300 500 900 1000 Quantity The short-run equilibrium price for the monopolistically competitive firm represented in the graph above is: $0.95. $1.00. $0.60. $0.85. MR