uppose price exceeds average total cost for a monopolistically competitive firm.  The firm should definitely   Question 3 options:   a)  should increase output   b)  experience short run economic profits    c)  should decrease output    d)  should raise its price

Price and cost per unit MC X P3 P₂ Demand MR 0 Q₁ Q3 Q4 According to the figure above, what is the monopolistic competitor's profit-maximizing output? Q* P₁ Q3 units Q2 units Q4 units Q1 units ATC Quantity

In the long-run equilibrium of a monopolistically competitive industry, the zero-profit point is to the left of minimum average cost. EXPLAIN WHY? (Explanation with graph.)

Suppose a monopolistically competitive firm has a marginal cost of $2 and a marginal revenue of $8.  The price of the product exceeds ATC.  The monopolistically competitive firm should _____ its output and ______its price.    Question 8 options:   a)  decrease; increase    b)  increase; increase   c)  increase; lower   d)  decrease; decrease

The diagram below illustrates a firm under monopolistic competition: (a) Label the curves Curve I, Curve II, Curve III, Curve IV. (b) Graphically identify profit maximizing output and price (c) Explain how the amount of profit is defined at the maximum-profit output. II II IV Q

A monopolistically competitive firm is operating at a short-run level of output where price is $40, average total cost is $29, marginal cost is $32, and marginal revenue is $32. In the short run this firm should Multiple Choice reduce product price. increase the level of output. decrease the level of output. not change the level of output.

The figure below shows the demand curve (DD), the marginal revenue curve (MR), and the cost curves of a monopolistic competitor. Price A 3 MR QE B) Loss incurred by the producer C) Consumer surplus D) Deadweight loss ATC 25) A monopolistically competitive firm A) earns low but positive economic profits B) earns high economic profits C) earns zero economic profits D) incurs losses DD Quantity 24) Refer to the figure above. What does the region ABDC indicate? A) Economic profit MC in the long run.

Question 3 In a monopolistically competitive industry, firms set price Group of answer choices equal to marginal cost since each firm is a price taker. below marginal cost since each firm is a price taker. above marginal cost since each firm is a price setter. always a fraction of marginal cost since each firm is a price setter.

What does it mean in a monopolistically competitive market, when the rule for maximizing profit is to set MR = MC? Group of answer choices Price is equal to marginal revenue. Price is equal to marginal cost. Price is lower than marginal revenue. Price is higher than marginal revenue.

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.