at the Because this market is a monopolistically competitive market, you can tell that it is in long-run equihbrium by the fact that the efficient scale. optimal quantity for each firm. Furthermore, the quantity the firm produces n long-run equilibrium is True or False: This indicates that there is a markup on marginal cost in the market for jackets. OTrue False
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- If the firms in a monopolistically competitive market are earning economic profits or losses in the short run, would you expect them to continue doing so in the long run? Why?The graph depicts the long run average total cost curve for Judy's Gyros - a fast food firm in a monopolistically competitive market. In a long run equilibrium, Iratc 100 gyros Select one: O a. Judy's output would be less than 100 gyros O b. Judy's output would equal 100 gyros O c. Judy would be charging a price equal to marginal cost O d. Judy's output would be more than 100 gyrosTI,e market for peanut butter in , utville is monopolistically competitive and in long-run cquilibriun,.One day, consumer advocate Skippy )if discovers thatall brands of peanut buuer in · utville arc identical.TI,ercalter, the market beromes perfectly compctiti vc and again reaches its long-run equilibriun. Usingan appropriate diagram, explain whether each of thefollowing varmblcs increases, decreases, or stays thesame for a typical firm in the market.a. priceb. quantityc. average total costd. margi.na.l coste. profit
- 9 of 15 Warwick Inc. produces in a monopolistically compettive market. Which of the following corectly explains howa fmin this market struchure would transition trom the short run to the long run? O The supemomal profits eamed by Warwick Inc in the short run will attract new firma into the market. This wil shit the market supply curve to the right, which will reduce the market price and the price faced by Warwick ine. The price wil keep falling until Average Revenue equals Average Cost and only normal profits are made. O The supermormal profits eamed by Warwick Inc. in the short run will attract new firms into he martet. This wil shit Warwick ine. demand curve to the left and t wit continue to shit left until Average Revenue equals Average Cost and only normal profits are made O The supemomal profits eamed by Wanwick Inc. in the short run will lead to the market demand aurve shifing to the right, which will raise the price fims can sell at and ts wil atract now frms into the market.…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.Suppose that a firm produces wool jackets in a monopolistically competitive market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. 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 (Dollars perjacket) 100 90 80 70 60 50 40 30 20 10 0 0 MC 10 ATC MR 20 30 40 50 80 70 QUANTITY (Thousands of jackets) 80 Demand 90 100 O F ++ Mon Comp Outcome Min Unit Cost hp e
- cosider this statement:" because price equals longr-un average cost and profits are zero, a monopolistically competitive firm is efficient. "Do you agree ir disagree? explainStudy Tools ins ess Tips ss Tips PRICE (Dellars per engine) 288 RSS #RR 100 50 30 20 10 MO 0 0 10 ATC MR Demand 20 30 40 50 70 DO 90 QUANTITY (Thousands of engines) 100 Mon Comp Outcome Min Unt Cost Decause this market is a monopolistically competitive market, you can tell that it is in long-run equilibrum by the fact that optimal quantity. Furthermore, a monopolistically competitive firm's average total cost in long-run equilibrium is average total cost. at the the minimumWhat is an assumption of the model of monopolistic competition? O Consumers lack adequate information about the prices and qualities of products. O There are significant barriers to entry in the market. O There are only a few firms in the industry. O Nonc of thesc choices.
- Explain the profit-maximizing output leveland profitof a monopolistic firm by drawing a graph. What are the advantages of internal economies of scale? Explain them briefly. What is the meaning of ‘acceptable loss’for a perfectly competitive firm ? Draw a graph and explain. How can we increase the Total Revenue of productsby using elasticity? Explain them briefly.You are hired as a consultant to a monopolisticallycompetitive firm. The firm reports the followinginformation about its price, marginal cost, andaverage total cost. Can the firm possibly bemaximizing profit? If not, what should it do toincrease profit? If the firm is maximizing profit, is themarket in a long-run equilibrium? If not, what willhappen to restore long-run equilibrium?a. P < MC, P > ATCb. P > MC, P < ATCc. P 5 MC, P > ATCd. P > MC, P 5 ATCQUESTION 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.