Whether the monopolistically competitive firms produce economic profits because they are protected.

Question

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Answer 1

Question

Chapter 15, Problem 1P

(a)

To determine

Whether the monopolistically competitive firms produce economic profits because they are protected.

(a)

Expert Solution

Answer to Problem 1P

Disagree.

Explanation of Solution

There are many buyers and sellers in the market. The sellers sell differentiated products which means there is competition in the market. However, it is important to note that there are no barriers to entry and exit in monopolistic competition, which means the statement is not agreeable.

Economics Concept Introduction

Monopolistic competition: Monopolistic competition is a type of imperfect competition where many producers produce and sell differentiated products and there is freedom of entry and exit.

(b)

To determine

Whether the monopolistically competitive firms are efficient in the long run.

(b)

Expert Solution

Answer to Problem 1P

Disagree.

Explanation of Solution

There are large number of buyers and sellers, product differentiation as well as freedom of entry and exit into and out of the market under the monopolistic competition. However, it is important to note that the price in the monopolistic competition does not equal the marginal cost either in the short run or in the long run, which means that the monopolistically competitive industry is not efficient in the long run. Thus, the statement is not agreeable.

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Students have asked these similar questions

The diagram above represents a monopolistically competitive firm. Answer the questions below. From the diagram, economies of scale are maximized at which output level? Explain. From the diagram, what is the allocatively efficient output for this firm? Explain.

Which of the following statements is true? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. b С d Monopolistic competitive firms that earn economic profits in the short run commonly will find their profits competed away in the long run. Monopolistic competitive firms will earn economic profits in the long run because of their ability to control the price of the product. Monopolistic competitive firms will earn zero economic profits in both the short and the long run. Monopolistic competitive firms must earn economic profits in the long run, or they will shut down.

Give an example of a market that has monopolistic competition and explain how the example you have chosen exhibits competitive aspects and how it also exhibits monopolistic aspects.

Answer 2

Question

Chapter 15, Problem 1P

(a)

To determine

Whether the monopolistically competitive firms produce economic profits because they are protected.

(a)

Expert Solution

Answer to Problem 1P

Disagree.

Explanation of Solution

There are many buyers and sellers in the market. The sellers sell differentiated products which means there is competition in the market. However, it is important to note that there are no barriers to entry and exit in monopolistic competition, which means the statement is not agreeable.

Economics Concept Introduction

Monopolistic competition: Monopolistic competition is a type of imperfect competition where many producers produce and sell differentiated products and there is freedom of entry and exit.

(b)

To determine

Whether the monopolistically competitive firms are efficient in the long run.

(b)

Expert Solution

Answer to Problem 1P

Disagree.

Explanation of Solution

There are large number of buyers and sellers, product differentiation as well as freedom of entry and exit into and out of the market under the monopolistic competition. However, it is important to note that the price in the monopolistic competition does not equal the marginal cost either in the short run or in the long run, which means that the monopolistically competitive industry is not efficient in the long run. Thus, the statement is not agreeable.

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Answer 3

Question

Chapter 15, Problem 1P

(a)

To determine

Whether the monopolistically competitive firms produce economic profits because they are protected.

(a)

Expert Solution

Answer to Problem 1P

Disagree.

Explanation of Solution

There are many buyers and sellers in the market. The sellers sell differentiated products which means there is competition in the market. However, it is important to note that there are no barriers to entry and exit in monopolistic competition, which means the statement is not agreeable.

Economics Concept Introduction

Monopolistic competition: Monopolistic competition is a type of imperfect competition where many producers produce and sell differentiated products and there is freedom of entry and exit.

(b)

To determine

Whether the monopolistically competitive firms are efficient in the long run.

(b)

Expert Solution

Answer to Problem 1P

Disagree.

Explanation of Solution

There are large number of buyers and sellers, product differentiation as well as freedom of entry and exit into and out of the market under the monopolistic competition. However, it is important to note that the price in the monopolistic competition does not equal the marginal cost either in the short run or in the long run, which means that the monopolistically competitive industry is not efficient in the long run. Thus, the statement is not agreeable.

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Answer 4

Question

Chapter 15, Problem 1P

(a)

To determine

Whether the monopolistically competitive firms produce economic profits because they are protected.

(a)

Expert Solution

Answer to Problem 1P

Disagree.

Explanation of Solution

There are many buyers and sellers in the market. The sellers sell differentiated products which means there is competition in the market. However, it is important to note that there are no barriers to entry and exit in monopolistic competition, which means the statement is not agreeable.

Economics Concept Introduction

Monopolistic competition: Monopolistic competition is a type of imperfect competition where many producers produce and sell differentiated products and there is freedom of entry and exit.

(b)

To determine

Whether the monopolistically competitive firms are efficient in the long run.

(b)

Expert Solution

Answer to Problem 1P

Disagree.

Explanation of Solution

There are large number of buyers and sellers, product differentiation as well as freedom of entry and exit into and out of the market under the monopolistic competition. However, it is important to note that the price in the monopolistic competition does not equal the marginal cost either in the short run or in the long run, which means that the monopolistically competitive industry is not efficient in the long run. Thus, the statement is not agreeable.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 15, Problem 1P

(a)

To determine

Whether the monopolistically competitive firms produce economic profits because they are protected.

(a)

Expert Solution

Answer to Problem 1P

Disagree.

Explanation of Solution

There are many buyers and sellers in the market. The sellers sell differentiated products which means there is competition in the market. However, it is important to note that there are no barriers to entry and exit in monopolistic competition, which means the statement is not agreeable.

Economics Concept Introduction

Monopolistic competition: Monopolistic competition is a type of imperfect competition where many producers produce and sell differentiated products and there is freedom of entry and exit.

(b)

To determine

Whether the monopolistically competitive firms are efficient in the long run.

(b)

Expert Solution

Answer to Problem 1P

Disagree.

Explanation of Solution

There are large number of buyers and sellers, product differentiation as well as freedom of entry and exit into and out of the market under the monopolistic competition. However, it is important to note that the price in the monopolistic competition does not equal the marginal cost either in the short run or in the long run, which means that the monopolistically competitive industry is not efficient in the long run. Thus, the statement is not agreeable.

Answer 6

Chapter 15, Problem 1P

(a)

To determine

Whether the monopolistically competitive firms produce economic profits because they are protected.

(a)

Expert Solution

Answer to Problem 1P

Disagree.

Explanation of Solution

There are many buyers and sellers in the market. The sellers sell differentiated products which means there is competition in the market. However, it is important to note that there are no barriers to entry and exit in monopolistic competition, which means the statement is not agreeable.

Economics Concept Introduction

Monopolistic competition: Monopolistic competition is a type of imperfect competition where many producers produce and sell differentiated products and there is freedom of entry and exit.

Answer 7

Chapter 15, Problem 1P

(a)

To determine

Whether the monopolistically competitive firms produce economic profits because they are protected.

Answer 8

(a)

Expert Solution

Answer to Problem 1P

Disagree.

Answer 9

(a)

Expert Solution

Answer 10

(a)

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

There are many buyers and sellers in the market. The sellers sell differentiated products which means there is competition in the market. However, it is important to note that there are no barriers to entry and exit in monopolistic competition, which means the statement is not agreeable.

Answer 13

Economics Concept Introduction

Monopolistic competition: Monopolistic competition is a type of imperfect competition where many producers produce and sell differentiated products and there is freedom of entry and exit.

Answer 14

(b)

To determine

Whether the monopolistically competitive firms are efficient in the long run.

(b)

Expert Solution

Answer to Problem 1P

Disagree.

Explanation of Solution

There are large number of buyers and sellers, product differentiation as well as freedom of entry and exit into and out of the market under the monopolistic competition. However, it is important to note that the price in the monopolistic competition does not equal the marginal cost either in the short run or in the long run, which means that the monopolistically competitive industry is not efficient in the long run. Thus, the statement is not agreeable.

Answer 15

(b)

To determine

Whether the monopolistically competitive firms are efficient in the long run.

Answer 16

(b)

Expert Solution

Answer to Problem 1P

Disagree.

Answer 17

(b)

Expert Solution

Answer 18

(b)

Expert Solution

Answer 19

Expert Solution

Answer 20

Explanation of Solution

There are large number of buyers and sellers, product differentiation as well as freedom of entry and exit into and out of the market under the monopolistic competition. However, it is important to note that the price in the monopolistic competition does not equal the marginal cost either in the short run or in the long run, which means that the monopolistically competitive industry is not efficient in the long run. Thus, the statement is not agreeable.

Answer 21

Ch. 15 - Prob. 1P Ch. 15 - Prob. 2P Ch. 15 - Prob. 3P Ch. 15 - Prob. 4P Ch. 15 - Prob. 5P Ch. 15 - Prob. 6P Ch. 15 - Prob. 7P Ch. 15 - Prob. 8P Ch. 15 - Prob. 10P Ch. 15 - Prob. 11P

Whether the monopolistically competitive firms produce economic profits because they are protected.

Solution Summary: The author opines that monopolistic competition is imperfect competition where many producers produce and sell differentiated products and there are no barriers to entry and exit into and out of the market.

Whether the monopolistically competitive firms produce economic profits because they are protected.

Answer to Problem 1P

Explanation of Solution

Whether the monopolistically competitive firms are efficient in the long run.

Answer to Problem 1P

Explanation of Solution

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Chapter 15 Solutions