How do the results of a competitive industry compare with that of a monopolistic industry? Group of answer choices -Competition results in lower prices and greater production. -Competition results in higher prices and higher production. -Competition results in higher prices and lower production. -Competition results in lower prices and lower production.
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- 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 dayMonopolistic Competition a. Graphically represent a monopolistically competitive firm, using the curves that would provide information such as the profit maximizing price and quantity as well as the cost at the profit maximizing quantity. b. Show the profit maximizing price and quantity for this firm at a price of $185 and a quantity of 7500. c. Show this firm earning a profit of $45000. Make sure to solve for the numerical value for the average total cost (ATC) at the quantity of 7500. d. As this is a short run scenario, state what will happen to the product price and average costs for this firm as it transitions from the short-run to the long-run.. 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
- Monopolistically competitive firms can earn above-normal economic profits in the short run. (a) In a few sentences, explain what will happen in the long run that will prevent monopolistically competitive firms from continuing to earn above-normal economic profits.1. Nori is a firm that sells products in an industry with a very high concentration of sellers. Nori's production decisions must consider its competitors' possible production decisions. In which market must Nori operate? A-Perfect market B-Monopoly market C-Oligopoly market D-Monopsony market E-Monopolistic competition 2. Koel is the single producer of home air conditioners in its rural market. The firm's monthly demand is described by the equation P = 5000 − 5Q, where P is the price and Q is the quantity of units sold. Which of the following must be true of Koel? A-An increase in price decreases the quantity sold. B-It is a natural monopoly. C-A decrease in price decreases the quantity sold. D-Higher levels of output bring in increasingly lower total revenue if demand is elastic. E-Maintaining the current price decreases the quantity sold over time.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)
- (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?Question 1a. How is monopolistic competition like monopoly, perfect competition andoligopoly? b. Give two examples of price discrimination. In each case, explain why themonopolist chooses to follow this business strategy c. Why does price equal marginal revenue for the perfectly competitive firm?What is the relationship to the demand curve for the firm?Firms compete in different types of market structures. In the real world, most markets are either monopolistically competitive or oligopolistic, and a few markets have a monopoly. Note that perfect competition is rare because no market has all the characteristics of a perfectly competitive market as described by the theory of perfect competition. 1. (a) What is a monopoly? Give an example. (b) How many firms are there in the Internet provider market? Is it easy or difficult for new firms to set up and compete in this industry? Explain. (c) How do firms in the Internet provider market compete?
- 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…PRICE (Dollars per bike) 500 450 400 350 300 250 200 150 100 50 0 0 MC 50 100 150 ATC MR 200 250 QUANTITY (Bikes) Demand 300 350 400 450 500 Monopolistically Competitive Outcome Given the profit-maximizing choice of output and price, the shop is making hp Profit or Loss shops in the industry relative to the long-run equilibrium. n profit, which means there are1. Why do monopolistic firms price their product within a price range where the demand is relatively elastic?
