What did Harvard economist Edward Chamberlin say about the observation that a monopolistically competitive firm's average cost of production exceeds its minimum average total cost? Select one: O a. Chamberlin argued that this belief is incorrect. In his view, monopolistically competitive firms do not produce at a cost above their minimum average total costs. O b. Chamberlin argued that these higher costs represent the wastefulness of this market structure. Oc. In Chamberlin's view, this is evidence that monopolistic competition uses society's resources inefficiently and in a fashion that merits government intervention. O d. According to Chamberlin, this cost difference represents the value consumers place on variety and having more choice.

What did Harvard economist Edward Chamberlin say about the observation that a monopolistically competitive firm's average cost of production exceeds its minimum average total cost? Select one: O a. Chamberlin argued that this belief is incorrect. In his view, monopolistically competitive firms do not produce at a cost above their minimum average total costs. O b. Chamberlin argued that these higher costs represent the wastefulness of this market structure. Oc. In Chamberlin's view, this is evidence that monopolistic competition uses society's resources inefficiently and in a fashion that merits government intervention. O d. According to Chamberlin, this cost difference represents the value consumers place on variety and having more choice.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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What is the "generic competition paradox"? Select one: O a. When the patent has expired and pricing is free, prescription tends to move towards innovative drugs with a patent. O b. It is a price discrimination mechanism observed in the United States when the patent has expired and pricing is free. O c. It is a price discrimination mechanism observed mainly in Europe when the patent has expired and pricing is free. O d. When the patent has expired and pricing is free, the price of generics falls to the marginal cost, so the revenues of the innovative firms are not sufficient to cover R&D costs of the drug whose patent has expired.
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Assuming that the monopolistic competitor faces the demand and costs depicted below and finds the profit maximizing level of output, what will be the firm's profit? 36 32 28 24 20 16 12 8 4 O O 1 O MC1 ATC₁ FAVC₁ Select one: O a. $8 b. $-32 c. $-64 d. $12 x Incorrect. The profit maximizing output is 4 units where Marginal cost equals marginal revenue. At that output, use the demand curve to find the price and calculate total revenue. At that output, use the average cost curve to find the average cost and calculate total cost. Then calculate profit = total revenue - total cost. MR1 D₁ 2 3 4 5 6 7 8 9
Which of the following is a difference between monopolistic and perfect competition? O A. In perfect competition goods are identical whereas in monopolistic competition they are differentiated O B. In perfect competition firms always have zero economic profits, whereas in monopolistic competition firms always have positive economic profits O C. In monopolistic competition there are barriers to entry whereas in perfect competition there are none O D. In perfect competition the price is set by the market, but in monopolistic competition, the firm can charge whichever price they want
monopolistically competitive markets, zero economic profit is associated with: saved 1 out of question Select one: O a. Inefficient output and excess capacity. O b. Competitive equilibrium because other firms entered the market. O c No deadweight loss O d. Efficient output and no excess capacity. Clear my choice Australian Institute of Business & Management
Can you explain it simply and clearly, especially the formula? Productive and Allocative Efficiency of Monopolistic Competition Price = Minimum Average Total Cost Most of the monopolistic competitive firms cannot achieve productive efficiency since they sell a higher or bigger price than the minimum average cost, and it can actually cost a loss of money in their minimum ATC. In monopolistic competitive firms they can also use their excess capacity but they would only produce a quantity equal to their minimum ATC. Yet they Might not be able to sell that in the amount without lowering their prices. So it's either reducing their profits or incurring losses. In addition, monopolistic firms doesn't meet the allocative efficiency. They cannot achieve it because allocative efficiency requires that Price = Marginal Cost. The monopolistic firm shows a downward sloping demand curve which means to sell more unit they must lower the price of all the units. The firm maximize profits when…
Explain why it is not possible for a monopoly firm to maximise its profits by charging a price in the price region where demand is inelastic, even though there are no direct substitutes for its product. Also explain how a monopoly will be able to charge a higher price than a firm producing the good under perfect, oligopolistic, or monopolistic competition
Intel and Advanced Micro Devices make most of the chips that power a PC. What makes the market for PC chips a duopoly? The PC chip market is a duopoly if O A. at the efficient scale, two firms can satisfy the market demand OB. each firm can divide its consumers into two categories-business consumers and household consumers O C. the two firms can charge different prices for the same quality of PC chip O D. the market produces two goods Assume that Intel and Advanced Micro Devices have identical costs. The graph shows the market demand curve. Draw the average total cost curve of one firm if the chip market produces 800 chips an hour and other firms are prevented from entering. Label the curve. Draw a point on the average total cost curve at the efficient scale. 110- 100- 90- 80+ 70- 60+ 50- 40- 30- 20+ 10- 0- Price (dollars per chip) 0 $800 200 400 800 600 Quantity (chips per hour) >>> Draw only the objects specified in the question. D 1000 Q Q 1200
Assume that in short-run equilibrium, a particular monopolistically competitive restaurant (Applebee's) charges $12 for each order of Chicken Parmesan and sells 52 orders per day. The average total cost (ATC) for those 52 orders is $10. How much revenue will the firm take in each day? $ What will be the firm's economic profit or loss on Chicken Parmesan? Next, suppose that other restaurants add/remove chicken parmesan from their menus (entry or exit occurs) and a long-run equilibrium is established. If the Applebees daily Chicken Parmesan orders remain at 52 units, what price will it be able to charge? $ What will be its economic profit or loss?
Exhibit 10.5 Price 3.25 3.00 2.50 0 700 1,000 MC MR ATC D = AR Quantity Exhibit 10.5 shows the demand, marginal revenue, and cost curves for a monopolistically competitive firm. At the profit-maximizing (or loss-minimizing) output and price, the firm would O a. have to expand to stay in business in the long run. O b. be better off shutting down, since total revenue does not cover fixed costs. O c. be experiencing an economic loss. O d. be earning an economic profit. O e. be earning zero economic profit.
In monopolistic competition, which of the following most accurately describes the long run equilibrium conditions for a firm? O P>ATC; MR=MC; P>MC O P>ATC; MR>MC; P=MC O P=ATC; MR=MC; P>MC OP=ATC; MR=MC; P=MC O P=ATC; MR>MC; P>MC