Comparing a perfectly versus monopolistic competitive market, in the long run what happens to prices and profits? a) Has equal profit and higher prices b) Has equal profit and lower prices c) Has equal profit and equal prices.

Comparing a perfectly versus monopolistic competitive market, in the long run what happens to prices and profits? a) Has equal profit and higher prices b) Has equal profit and lower prices c) Has equal profit and equal prices.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 1QFR

See similar textbooks

Related questions

Q: Suppose that country Y is identical to country Z, with the exception that country Y's population has…

A: Autonomous expenditures are expenditures that do not vary with the economy’s real level of income.…

Q: A farmer has 1 acre of land. If he uses X pounds of fertilizer he can harvest √x tons of wheat. What…

A: The production function establishes a relationship between the input quantity and the overall…

Q: Assume that the gross domestic product is $6,000, personal disposal income is $5,100, the government…

A: Gross Domestic Product is the sum of all the values of the total goods and services produced inside…

Q: You have £2,000 and you can only choose one of the following two investments. First, you may deposit…

A: To compare the two investment options, we have to calculate the expected returns for each.Option 1:…

Q: n some circumstances, individuals reproduce better when the population size is large, and fail to…

A: The Allee effect is a phenomenon in the population study where individuals have difficulty…

Q: Canada's government savings bonds pay 2.5% annual real rate of return compounded daily. Professor…

A: Annual real rate of return on savings bond= 2.5 percent compounded daily.Amount of money invested by…

Q: The table below shows the cost information for a firm in a perfectly competitive industry. If all…

A: Perfect competition is a kind of theoretical market concept, where there are no monopolies or upper…

Q: Cindy has $70 a month to spend, and she can spend as much time as she likes playing golf and tennis.…

A: Total Utility:Definition: Total utility refers to the overall satisfaction or pleasure a consumer…

Q: Refer to Figure 9-4. What price would a monopolist charge when maximizing profits? a. P₁ b. P4 OC.…

A: The Monopoly refers to market where only single firm exists in the market. Monopoly firm can earn…

Q: Assume a firms production function depends on labour hours (L) only and is give F(L) = 5L0.8 .…

A: The production function shows the relationship between output and input. Here, only one input is…

Q: * The accompanying diagram shows an AD/AS diagram. The economy begins at Eo with output equal to Y .…

A: Economies characterized as open engage in international trade and financial connections,…

Q: Consider an AD-AS model with AD curve Y - Y* = −ay(n − ñ*) + €d π = π² + ß(Y - Y*) + €s with…

A: Aggregate supply refers to the cumulative quantity of a firm's production and selling, or the real…

Q: The graph to the right shows the demand and cost curves for a natural monopoly. 1.) Using the point…

A: The monopoly market is the market structure characterised by a single seller and many buyers. The…

Q: Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Unemployment Rate Inflation rate % % 8.24…

A: Unemployment is the economic state in which individuals who are actively seeking employment are…

Q: Everett also works in the perfectly competitive manicure industry. The market price is $20 and he…

A: In general terms, cost is the amount paid in order to acquire any resource or service. The main aim…

Q: Refer to Figure 12-10. The firm's short-run supply curve is its marginal cost curve from c and…

A: The supply curve represents positive relationship between price and quantity supplied. When the…

Q: A majority of economists believe that in the long run, real economic variables and nominal economic…

A: The aggregate demand curve shows the quantity of output that households, firms, the government, and…

Q: Which country has an absolute advantage in the production of beer and which country in butter

A: Absolute advantage occurs when a producer can provide a good or service in greater quantity for the…

Q: Figure 9.3 shows the cost structure of a firm in a perfectly competitive market. If the market price…

A: The minimum point where a firm would want to continue with its production process is where marginal…

Q: If the Bank of Canada wanted to reduce inflation, it could Select one: a. increase the reserve…

A: Banking institutions promote fiscal transactions by offering services like deposits and loans, which…

Q: Given Jon's marginal utility from consuming packets of potato chips in the table below, calculate…

A: Total utility refers to the satisfaction or pleasure a consumer derives from consuming a good. The…

Q: Price $20 18 16- 14 12 10- 8 100 200 B 300 400 + 500 600 D Quantity Starting at P = $18, if we…

A: Total revenue is the amount obtained by multiplying the price per unit by the quantity of output. It…

Q: 6. Why the aggregate supply curve slopes upward in the short run In the short run, the quantity of…

A: Aggregate supply curve illustrates the positive relationship between price level and output in an…

Q: 1. You are evaluating two vehicle lease options. The table below contains the details for each…

A: To determine the most economical lease using present worth, we need to calculate the present value…

Q: 2. Given the utility function U(x; y)=x²y³, and P-3 while P-2, with budget m=100. Measure the MRS,…

A: Note: Since you have posted a question with multiple sub-parts, we will provide the solution only…

Q: The economy of Morin is shown in the figure below. Price Level 170 150 130 110 90 The Economy of…

A: Real GDP is the value of the output produced over a period. This may be in a quarter or a year. It…

Q: National income account Personal consumption expenditures Personal taxes Government consumption and…

A: GDP is the sum total of the market value of final goods and services produced in a country during a…

Q: The graph to the right shows the goods market in equilibrium at point Y₁- Use the graph to show the…

A: The aggregate expenditure (AE) refers to the total expenditure in an economy over a period which is…

Q: Use the table below to answer the following questions. Real Consumptio GDP n $300 310 320 330 340…

A: DISCLAIMER “Since you have asked multiple questions, we will solve the first three questions for…

Q: passage. Drag word(s) below to fill in the be economists believed that the economy take place…

A: A subfield of economics known as macroeconomics studies the economy as a whole at the aggregate…

Q: Consider two hypothetical countries. In Country A, 18 percent of the labour force is unemployed for…

A: This can be defined as a situation In which the person is actively finding a job and has have…

Q: Based on the money market model, when real GDP increases, the equilibrium interest rate should…

A: An equilibrium interest rate will be determined at the intersection between the supply and demand of…

Q: PRICE AND COST I I I I I greater less The market output is greater QUANTITY Demand than the socially…

A: Negative externalities occur when a transaction has a cost that neither the buyer nor the seller is…

Q: Complete the first row of the table to reflect the state of the markets in Mexico. Real Interest…

A: The interest rate that an investor, saver, or lender receives after taking inflation into account is…

Q: Refer to the table below. Note that the first column shows variable costs. Quantity Cost 0 1 2 3 5 6…

A: The firm will produce where the marginal revenue is equal to marginal cost to maximize its profit.…

Q: For questions 2--5, consider the simplified model of time inconsistency discussed in the lecture.…

A: Inflation is the general increase of the prices of goods and services in an economy. This is usually…

Q: Consider a competitive firm that produces two specific goods. The firm's cost function for the two…

A: The cost function of a firm producing two commodities is given byThe price of first commodity is…

Q: The graph illustrates the market for pulp and paper with no government intervention. The pulp and…

A: The overall price society pays for the creation of an additional unit or for engaging in additional…

Q: The graphs in Figure 12-17 represent the perfectly competitive market demand and supply curves for…

A: The perfectly competitive market refers to market where all firms are price-takers and single firm…

Q: What about barbados?

A: Here's a comprehensive overview of Barbados' economic situation and the rationale behind the…

Q: If a $6 per unit tax is introduced in this market, then the price that consumers pay will equal…

A: At the equilibrium price, the quantity demanded is equal to the quantity supplied.Equilibrium occurs…

Q: Joe has $62 to spend on apples and oranges. Given the information in the following table, is Joe…

A: Joe's budget for apples and oranges is $62.The marginal utility on the last unit of the apple is 30…

Q: Draw a graph for a market where a negative externality occurs. Show the market supply curve and the…

A: An externality is an indirect cost to an uninvolved third party that arises as an effect of another…

Q: The following information relates to a project Year Cash flow Sh. 'Millions' (16) 8 10 1 2 3 114 16…

A: A project should abandoned in an year which provides higher rate of return over the cost of capital…

Q: Figure: The Home and World Markets The supplied graph shows the case for a tariff imposed by a large…

A: Terms of trade are defined as the index of export prices divided by the index of import prices.…

Q: A student is buying a new car. The car's price is $26,500, the sales tax is 8%, and the title,…

A: Nominal Interest Rate: This is indeed the stated interest rate on a loan or investment without…

Q: An investor has preferences represented by a utility function u(c) and initial wealth w > 0.…

A: Utility function : U (c ) = c0.5Probability of G = pi Probability of B = (1-pi ) G = 10 , B =…

Q: Calculate net exports and the amount of net foreign lending for a hypothetical small open economy…

A: Net export : Net export is the amount by which the total value of exports of a country surpasses or…

Q: Wendy drinks 01 sugary drinks and 4smoothies a wek. Smoothies are $5 each and sugary drinks were $2…

A: A budget line shows various combinations of two goods a consumer can purchase by spending all of…

Q: A random sample of six salespersons that attended a motivational course on sales techniques was…

A: First, we will calculate the pooled variance (s2p): 1. Calculate the squared deviation of each…

Question

Comparing a perfectly versus monopolistic competitive market, in the long run what happens to prices and profits?

a) Has equal profit and higher prices

b) Has equal profit and lower prices

c) Has equal profit and equal prices.

Definition Definition Form of market structure in which there are a large number of sellers of a particular product, with each seller selling somewhat differentiated but close substitutes to the product sold by other sellers. Features of monopolistic competition include: Large number of buyers and sellers Differentiated products Free entry and exit of the firms in the market

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Perfectly competitive market

VIEW

Step 2: Monopolistic competitive market

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Draw the curve of monopolistic competitive market when experiencing short-term losses, what should producers do when experiencing short-term losses? Explain with the help of the relevant curves!
In what way(s) is a monopolistically competitive firm inefficient? Group of answer choices It charges a price lower than marginal cost. It produces where marginal revenue is equal to marginal cost. It does not produce at the minimum of its average cost curve.
Give an example of a market that has monopolistic competition and explain how the example you have chosen exhibits competitive aspects and how it also exhibits monopolistic aspects.
Explain the characteristics of monopolistic competition . What are the advantages of this market structure to the consumers ? Are there any disadvantages of this market structure to the consumers?
Which form is a monopolistic competitor operating in the long run?
A. How does the demand curve faced by the firm in monopolistically competitive market differ from the demand curve faced by a firm participating in a purely competitive market? b. How does that impact how the firm sets its price and the quantity the firm produces?
how does a firm behaves in monopolistic competition and explain the outcomes for the firm in the short run and in the long run.
List the three key attributes of monopolistic competition. Draw and explain a diagram to show the long-run equilibrium in a monopolistically competitive market. How does this equilibrium differ from that in a perfectly competitive market?
Monopolistic market structure is characterized by large number of buyers and seller selling close substitute, product differentiation, selling cost, 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?
If a monopolistically competitive industry is earning short-run positive economic profits, what do we expect to happen in the long run? a Existing firms will exit. b New firms will enter. c The industry will be regulated. d Firms will collude to keep prices high.