In the long run, a monopolistically competitive firm will charge prices that are ______________ a perfectly competitive firm and will normally produce an amount that is ______________ a perfectly competitive firm.   a greater than; equal to b equal to; less than c less than; equal to d greater than; less than

23) When MR= MC and P= ATC for a monopolistically competitive firm, the firm is in A) short-run disequilibrium. B) long-run disequilibrium. C) long-run equilibrium. D) neither short-run nor long-run equilibrium.

DuopolyMarket for mechanical pencils can be described by the following demand schedule:Price | Number of pencils demanded$6 | 80$5 | 200$4 | 320$3 | 440$2 | 560$1 | 680$0 | 800The fixed cost is $340, while the variable cost is $0.50.a) For each price, find the total revenue, the total cost, and the profit.b) If the market was under perfect competition, what would be the price and the quantity ofpencils traded in the long run? Why?c) If there was only one seller on the market, what would be the price and the quantity ofpencils traded? Why?d) If there were two firms on the market and they agreed to cooperate, how much would eachfirm need to produce? Follow the procedure outlined in the lecture and show that the otherfirm would prefer to deviate from the agreement.e) When the firms deviate from the agreement, there is a new optimal level of output. Showwhether the firms have an incentive to deviate from that level?f) If there were two firms on the market, what would be the price and the…

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Microlith, Inc. operates in a monopolistically competitive market.  Using an appropriate diagram, explain why this firm will set P > MC, but will still earn zero economic profit in the long run.

ou are hired as a consultant to a monopolistically competitive firm. The firm reports the following information about its price, marginal cost, and average total cost: P<MC, P>ATCP<MC, P>ATC   Which of the following statements are true about the firm? Check all that apply. The firm is possibly maximizing profit.   The firm is in long-run equilibrium.   The firm can increase its profit by reducing its output.

The zero profit condition is assumed for the long run equilibrium under monopolistic competition all things equal. So explain why it is possible for firms under monopolistic competition to escape the zero profit conditions while it is much less likely under perfect competition?

The market for Banh Mi in Auckland CBD consists of 6 restaurants operating in monopolistic competition. Suppose that these firms face monthly fixed costs of $5,000 and marginal costs of $3. a) Draw the average cost and marginal cost curves for a representative firm. b) If the short run market price is $6 and each firm sells 2000 units per month, what will occur in the long run? Explain and show on a graph. c) Suppose that Banh Mi become more popular as a lunch option, and market demand increases. Explain the short run and long run effects on the market, including price, firm-level quantity and number of firms. Use graphs to explain your answer.

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