4. Conditions for monopolistic competition Consider the monopolistically competitive market structure, which has some features of a competitive market and some features of a Complete the following table by indicating if each attribute characterizes a competitive market, a monopolistically competitive market neither. Check all that apply. Attributes Competitive Market Monopolistically Competitive Market Few sellers Identical products Product differentiation Price is equal to marginal revenue 口|口 ロ|口

The graph depicts a monopolistically competitive firm. Assuming the firm's ATC is ATC', the firm's current economic profit (per day) is_____, and its long-run economic profit is _____. Price and cost $40 30 23 20 10 0 $3,000; $0 $1,500; $0 $1,500; $2,500 $4,000; $3,000 MR 150 200 MC ATC ATC AR=D Quantity (per day)

ls uccess Tips ■ccess Tips NOUT Actumpto Koup the Highest/3 3. Is monopolistic competition efficient? Suppose that a firm produces baseball bats 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 par bat) 80 70 60 20 MO о о 10 20 40 ATC 60 QUANTITY (Thousands of bas) Demand Man Camp Outcome Min Unit Cost Because this market is a monopolistically competitive market, you can tell that it is in long-run equilibrium by the fact that optimal quantity. Furthermore, the quantity the firm produces in long-run equilibrium is average total cost. at the the quantity at which…

1. Briefly discuss the various ways monopolistically competitive firms can differentiate their products?   2.  In the long-run, a perfectly competitive firm will earn what kind of economic profit?