1. In the long-run, economic profits or losses will be eliminated through firms entering or leaving the industry. 2. Unless their market positions are very secure, firms will practice "limit pricing" to forestall other firms entering the industry. 3. Static efficiency is assured in the long run in this market. 4. The actions of one seller in the market significantly impacts other sellers. 5. Firms often exhibit "price leadership" behavior where one firms sets a price with all other firms matching the price. 6. Firms often compete vigorously on every aspect of the marketing mix (price, product, promotion, distribution) EXCEPT price. 7. This market structure is likely to be conducive to dynamic efficiency.

Q. 2

1. Under the model of monopolistic competition, a(an) ________ in the number of firms in the industry will cause ________ to ________. 2. In the model of monopolistic competition, if the price is ______ than average costs, then firms are earning __________ economic profit and we should expect firms to _________ the industry. 3. In the model of monopolistic competition, if an industry has large ________ relative to another industry, then we should expect _________ firms to operate in a long-run equilibrium of that industry.

WataDine is one of a city’s many restaurants that serve lunch and dinner in a monopolistically competitive market. Assume WataDine, as a typical restaurant in the city, is currently producing the profit-maximizing output level, and earns positive short-run economic profit. (a) How is monopolistic competition similar to each of the following market structures? (i) Perfect competition (ii) Monopoly (b) WataDine is currently earning short-run economic profits. Draw a correctly labeled graph for WataDine in short-run equilibrium and show each of the following. (i) The profit-maximizing quantity, labeled QM (ii) The profit-maximizing price, labeled PM (c) Given that WataDine is currently earning short-run economic profits, what will happen to each of the following in the long run? (i) WataDine's economic profit. Explain. (ii) WataDine's demand curve for its restaurant meals. (d) Assume WataDine is in long-run equilibrium. (i) Is WataDine taking advantage of its economies of scale? Explain.…

True/False I need help with the last three most

(i) Use the graph below to explain the output, profit and loss conditions for monopolistically competitive firms. Show your work where appropriate in reference to the Graph.Firm Lan T-shirt monopolistic competitive firm     (ii) With examples, examine the barriers to business entry for imperfect competition firms

If Amazon sells dozens of similar types of pencils at slightly different prices, we might assume the pencil market is _________. Select one: a. an oligopoly. b. a monopolistically competitive market. c. a monopoly. d. a perfectly competitive market.

Answer all four questions! Is a monopolistically competitive firm productively efficient? How can you tell? Offer one reason why a monopolistically competitive firm might be productively inefficient. Is it allocatively efficient? How can you tell? Offer one reason why a monopolistically competitive firm might be allocatively inefficient.

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?

Price and costs Consider the diagram below depicting the demand and cost conditions faced by a monopolistically competitive firm. a. Use the graph to show how price and output will vary depending upon which point the firm produces. Indicate the levels that will be produced under profit maximization, productive efficiency, and allocative efficiency. Instructions: (1) Use the tool provided 'Profit maximizing' to plot a point showing the price-quantity combination when the firm is maximizing profit. (2) Use the tool provided 'Productive efficiency' to plot a point showing the price-quantity combination when the firm is producing the productively efficient output level. (3) Use the tool provided 'Allocative efficiency' to plot a point showing the price-quantity combination when the firm is producing the allocatively efficient output level. Demand MR Quantity MC Tools -9 --i Productive eff Profit maximiz ATC Allocative effi