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profit, which means there are shops in the Given the profit-maximizing choice of output and price, the shop is earning industry than in long-run equilibrium. Now consider the long run in which bike manufacturers are free to enter and exit the market. Show the possible effect of easy entry and exit by shifting the demand curve for a typical individual producer of bikes on the following graph.

profit, which means there are shops in the Given the profit-maximizing choice of output and price, the shop is earning industry than in long-run equilibrium. Now consider the long run in which bike manufacturers are free to enter and exit the market. Show the possible effect of easy entry and exit by shifting the demand curve for a typical individual producer of bikes on the following graph.

Microeconomics A Contemporary Intro
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter10: Monopolistic Competition And Oligopoly
Section: Chapter Questions
Problem 11PAE
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50 MC 0 0 MR Demand 50 100 150 200 250 300 350 400 450 QUANTITY (Bikes) 500 Given the profit-maximizing choice of output and price, the shop is earning industry than in long-run equilibrium. profit, which means there are shops in the Now consider the long run in which bike manufacturers are free to enter and exit the market. Show the possible effect of easy entry and exit by shifting the demand curve for a typical individual producer of bikes on the following graph. (?) PRICE (Dollars per bike) QUANTITY (Bikes) Demand Demand Which of the following statements are true about both monopolistic competition and monopoly? Check all that apply. Price is above marginal cost. Price equals average total cost in the long run. Firms are not price takers. Firms earn zero economic profit in the long run.
Transcribed Image Text:50 MC 0 0 MR Demand 50 100 150 200 250 300 350 400 450 QUANTITY (Bikes) 500 Given the profit-maximizing choice of output and price, the shop is earning industry than in long-run equilibrium. profit, which means there are shops in the Now consider the long run in which bike manufacturers are free to enter and exit the market. Show the possible effect of easy entry and exit by shifting the demand curve for a typical individual producer of bikes on the following graph. (?) PRICE (Dollars per bike) QUANTITY (Bikes) Demand Demand Which of the following statements are true about both monopolistic competition and monopoly? Check all that apply. Price is above marginal cost. Price equals average total cost in the long run. Firms are not price takers. Firms earn zero economic profit in the long run.
3. Monopolistic competition in the short run and the long run Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC). 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. PRICE, COSTS, AND REVENUE (Dollars per bike) 500 450 400 350 300 250 ATC 200 150+ 100 50 MC 0 0 MR Demand 50 100 150 200 250 300 350 400 450 500 QUANTITY (Bikes) Monopolistically Competitive Outcome Profit or Loss profit, which means there are shops in the Given the profit-maximizing choice of output and price, the shop is earning industry than in long-run equilibrium. negative Now consider the long run in which bike manufacturers are free to enter an positive harket. zero Show the possible effect of easy entry and exit by shifting the demand curve for a cypical individual producer of bikes on the following graph. Domand
Transcribed Image Text:3. Monopolistic competition in the short run and the long run Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC). 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. PRICE, COSTS, AND REVENUE (Dollars per bike) 500 450 400 350 300 250 ATC 200 150+ 100 50 MC 0 0 MR Demand 50 100 150 200 250 300 350 400 450 500 QUANTITY (Bikes) Monopolistically Competitive Outcome Profit or Loss profit, which means there are shops in the Given the profit-maximizing choice of output and price, the shop is earning industry than in long-run equilibrium. negative Now consider the long run in which bike manufacturers are free to enter an positive harket. zero Show the possible effect of easy entry and exit by shifting the demand curve for a cypical individual producer of bikes on the following graph. Domand
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