If a monopolistically competitive market became perfectly competitive, output would likely: Choose correct and explain your choice a.rise. b.fall. c.not change. d.rise, then fall.d. has no relation to price.
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If a
a.rise.
b.fall.
c.not change.
d.rise, then fall.d. has no relation to price.
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- Why does a local McDonald's face a downward-sloping demand curve for its Quarter Pounder? In monopolistically competitive markets, A. changing the price affects the quantity sold because there are substantial barriers to entry . B. changing the price does not affect the quantity sold because firms have market power . C. changing the price affects the quantity sold because firms are price takers. D. changing the price affects the quantity sold because firms sell differentiated products. E. changing the price does not affect the quantity sold because firms are price makersWhat price will the monopolistically competitive firm charge in this market? A. $15 B. $400 C. $500 D. $700Please dont copy and paste the answers One of your former peers starts up a firm after graduating NYUAD. However, he didn’t take Markets so is unsure if he is behaving optimally. He’s asked you for help. His firm faces monopolistic competition, has diminishing returns to its inputs and uses a fixed input. He is producing at a quantity such that P=MC, and he makes a positive profit. a. Draw the Demand curve, MR, MC, and ATC reflecting this situation on a graph. Label the quantity, price and profit of the firm under his strategy. b. Is his strategy maximizing his profits? Explain how he would do so if not. Label the quantity, price and profit of the firm under the optimal strategy on your graph in part a. c. He asks you about what you predict might happen to his profits in the future. What do you expect will happen to profits in this industry as we go to long run and why? What is the key assumption of monopolistic competition that gives you your conclusion?
- If price is less than average cost in a monopolistically competitive market: A. there is no incentive for the number of firms in the market to change B. there is an incentive for firms to exit the market. C. the market must be in long-run equilibrium. D. there is profit incentive for firms to enter the market.In monopolistic competition, a firm has some ability to affect the price for its product because of Select one a. economic profits. b.easy entry and exit. C. many competitors product differentlation.Which of the following conditions does NOT describe afirm in a monopolistically competitive market?a. It sells a product different from its competitors.b. It takes its price as given by market conditions.c. It maximizes profit both in the short run and inthe long run.d. It has the freedom to enter or exit in the long run.
- 1. Why is the marketing concept sometimes difficult to implement in firms?The cost of producing a tube of tooth paste is $0.05. If the market for tooth paste is monopolistically competitive, a manufacturer who charges $0.05 for each bottle will ________. a. exit the industry in the long run b. earn zero economic profits in the short run c. incur a loss in the short run d. shut down production in the short runGive two characteristics of the following:a. a perfectly competitive marketb. a monopolistic market
- The major difference between a monopolistic competition and monopoly is, a. monopoly is a price taker and a firm in monopolistic competition is a price maker. b. there are barriers to entry and exit in monopolistic competition and freedom to enter and exit in monopoly. c. only a monopoly can earn an abnormal profit in the long run. d. None of these.A monopolistically competitive firm will shut down in the short run if: Select one: a. If it can not cover its total costs. b. If it can not attain normal profits. c. It can not cover its fixed costs. d. If it can not cover its variable costs.\IV hat is true of a monopolistically competitive marketin long-run eqUilibrium?a. Price is greater than margi nal cost.b . Price is equal to marginal revenue.c. Firms make positive economic profits.d. Firms produce at the minimum of average total cost.