In this unit we have seen that monopolistically competitive firms could increase the amount they produce and reduce the ATC of production. Why don't they?
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Exercise 5.5 In this unit we have seen that
Step by step
Solved in 3 steps
- Exercise A.6. Do monopolistically competitive markets normally have the optimal number of products?Exercise 5.1 Describe with the help of graphs the long-term equilibrium of a monopolistically competitive market. What is the relationship between price and ATC? And between the price and the MC?why monopolistic competition the food industry
- Exercise 5.2 Why is the firm's demand curve flatter than the total market demand curve in monopolistic competition? Suppose a monopolistically competitive company makes short-term profits. What will happen to your long-term demand curve? Represent graphically.Economics You are a manager of a monopolistically competitive firm that is currently charging a price of $5 for its product and, at this price you are selling 52,000 units of your product. At this price and quantity combination, you have estimated your own price elasticity of demand to be -2.0 and you have an advertising elasticity of 0.25. What is the optimal amount for you to spend on advertising?Which form is a monopolistic competitor operating in the long run?
- Exercise A.8. The graph below corresponds to a company operating in a market under conditions of monopolistic competition: € 5 4 3 2 1 CM CMe 20 40 60 90 100 120 Quantity of output a) What is the level of production maximizes the short-term profits of this company? b) What price will the company charge to maximize its profits? c) What benefits does the company obtain in the short term? d) How would advertising affect the curves shown in the graph? Would profits necessarily increase? Reason your answers.There are thousands of wheat farmers who produce and sell wheat and there are millions of consumers who use wheat and wheat products. What would the market for wheat be considered? Question 15 options: monopolistic perfectly competitive monopolistically competitive oligopolisticFRONT PAGE Pricing Disney+ Disney decided it wanted to provide streaming services directly to customers, rather than renting its library of films and television shows to other streaming services like Netflix. But how successful would a streaming service be? In other words, what did the demand for a "Disney+" streaming service look like? Disney knew that the number of subscribers would depend not just on the attractiveness of the Disney archives, but also on the subscription price. After doing some market research, Disney decided to launch Disney+ at a price of $6.99 a month (or $69.99 per year). When Disney+ was launched on November 12, 2019, 10 million people signed up on the first day-a resounding success! Source: News reports, October-December 2019. Suppose Disney+ changes its monthly subscription price from $7 to $9 per month. Graphically show the impact of this price change in the following markets: a. Popcorn, pizza, and other movie snacks
- Westchesser Gloves is a monopolistically competitive firm that sells leather gloves. Use the graph to highlight the area of profit or loss and answer the questions, Price per pair (5) 10 20 Marginal profit or loss: $ Aver co Pairs of gloves (in thousand) Demand 70 80 90 100 Profit or loss Calculate Westchesser's profit or loss at the profit-maximizing price. What will happen to the number of firms in this industry in the long run? Firms will enter this industry, increasing the price at which each firm can sell their gloves until firms begin to earn normal profits. O Firms will exit this industry, increasing the price at which each firm can sell their gloves until firms begin to carn normal profits. O Firms will exit this industry, decreasing the price at which each firm can sell their gloves until firms begin to carn normal profits. O Firms will enter this industry, decreasing the price at which each firm can sell their gloves until firma begin to carn normal profitsWhy does price elasticity of demand play such an important role in Ogligopolistic markets?Suppose the carwash market is monopolistically competitive and that businesses in this market are currently earning positive economic profits. In the long run, the demand for an individual car wash business will the market , which will cause economic profits to as more carwash businesses enter Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a fall; rise fall; fall to zero rise; fall to zero d rise; rise
