For such a monopolistically competitive firm, the following total cost (TC) relation is true both in the short term and the long term. TC=100+3Q+0.03Q^2 where Q is the output's volume. A risk-adjusted normal rate of return on the firm's investment is included in the TC function. For this monopolistically competitive firm, the short-term total revenue (TR) relation is given by: TR=11Q-0.01Q2. The firm's long-run demand curve is a parallel shift of its short-run demand curve because the firm maintains a high level of product differentiation. The firm should create ___ units of output to maximise total profit in the short term; ___ units of output to maximise total profit in the long term. 1 50;100 2 100;50 3 100;58 4 50;58

(b) Consider two firms, 1 and 2 , operating in a monopolistic competitive market. The cost functions of the firms are: TC_(1)=20+20 Q and TC_(2)=80+80Q, respectively. Would it be rational for both firms to compete in the world market, given the market demand curve of Q=100-P, and they have to bear a trade cost of $30 per unit? Explain with the help of a diagram. please give answer with compleete steps and diagram.

Three oligopolistic banks operate in the loan market with the inverse demand functiongiven by r (Q) = a-Q, where r is the interest rate per unit of loan and Q = q1 +q2 +q3and qi>=0 is the total amount of loans issued by bank i = 1, 2, 3. Also, a > 0 is aconstant. The cost of funds for bank i is given by cqi, where c belongs (0, a) is a constant.A bank's profit from loans is (r -c)qi. (1) Suppose the banks engage in Cournot competition. Find the symmetricNash equilibrium. How much profit does each bank make? (2) Now suppose banks compete in the following sequential manner: Bank1 chooses q1. Then banks 2 and 3 observe q1 and then simultaneously choose q2and q3, respectively. Find the subgame perfect equilibrium. How much profit doeseach bank make here? Does bank 1 enjoy an advantage being the first mover?

You are the manager of a firm that produces a product according to the cost function C(qi) = 210 +62q; – 8q? + q? . Determine the short-run supply function if: a) You operate a perfectly competitive business. b) You operate a monopoly. c) You operate a monopolistically competitive business.

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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. Note: Dashed drop lines will automatically extend to both axes. Select and drag the rectangles from the palette to the graph. To resize, select one of the points on the rectangle and move to the desired position. PRICE (Dollars per bike) 500 450 400 350 PRICE (Dollars per bike) 300 250 200 150 100 50 0 0 MC + 50 100 AC MR 150 200 250 300 350 400 450 500 QUANTITY (Bikes) Demand Enjano Given the profit-maximizing choice of output and price, the shop is earning shops in the industry than in long-run equilibrium. + Monopolistically Competitive Outcome Now consider the long run in which bike manufacturers are free to enter and exit the market. QUANTITY (Bikes) Show the possible effect of free entry and exit by shifting the…

Monopolistic competition creates inefficiency because of the markups and excess capacity. The graph below depicts the situation for a hypothetical monopolistically competitive firm. The curves included in the graph are demand (D), marginal revenue (MR), average total cost (ATC), and marginal cost (MC). The graph is not graded, but you can move the point labeled P to help you find the numeric values to answer the questions. Price $ 80 MC M 45 P D ATC Quantity What is the size of the markup on the price? Number $0 What is the size of the excess capacity? Number Units

E-Education is a new startup that develops and markets MBA courses offered over the Internet. The company is currently located in Chicago and employs 150 people. Due to strong growth, the company needs additional office space. The company has the option of leasing additional space at its current location in Chicago for the next two years, but after that will need to move to a new building. Another option the company is considering is moving the entire operation to a small Midwest town immediately. A third option is for the company to lease a new building in Chicago immediately. If the company chooses the first option and leases new space at its current location, it can, at the end of two years, either lease a new building in Chicago or move to the small Midwest town. The following are some additional facts about the alternatives and current situation. What should E-Education do? • The company has a 75 percent chance of surviving the next two years. • Leasing the additional space for…

If a monopolistically competitive firm is earning positive profits in the short-run, then we would expect more competition to enter the industry assuming there are no barrier to entry in the market: True or False

Suppose the inverse demand function for a monopolistically competitive firm's product is given by P = 100 – 20 and the cost function is given by CQ) = 5 + 2Q Determine the profit-maximizing price and quantity and the maximum profits.