Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN: 9781305971493
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 16, Problem 4CQQ
To determine
Monopolistic competition and the entry of firms to the market.
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New fams will enter a monopolistically competitive market if
a.marginal revenue is greater than marginal cost.
b.marginal revenue is greater than average total cost.
c.price is greater than marginal cost.
d.price is greater than average total cost.
A monopolistically competitive firm that earns an accounting profit in the short run
Group of answer choices
a. must also earn an economic profit in the short run.
b. does not earn enough to earn an economic profit in the short run.
c. could earn an economic profit, break even, or suffer an economic loss in the short run.
d. could earn an economic profit or break even, but could not suffer an economic loss in the short run.
When a monopolistically competitive industry is in long-run equilibrium: choose correct and explain your choice
a. firms earn economic profits.
b. firms earn zero economic profits.
c. price equals minimum average total cost.
d. price equals marginal cost.
Chapter 16 Solutions
Principles of Microeconomics (MindTap Course List)
Ch. 16.1 - Prob. 1QQCh. 16.2 - Prob. 2QQCh. 16.3 - Prob. 3QQCh. 16 - Prob. 1CQQCh. 16 - Prob. 2CQQCh. 16 - Prob. 3CQQCh. 16 - Prob. 4CQQCh. 16 - Prob. 5CQQCh. 16 - If advertising makes consumers more loyal to...Ch. 16 - Prob. 1QR
Ch. 16 - Prob. 2QRCh. 16 - Prob. 3QRCh. 16 - Prob. 4QRCh. 16 - How might advertising reduce economic well-being?...Ch. 16 - Prob. 6QRCh. 16 - Prob. 7QRCh. 16 - Prob. 1PACh. 16 - Prob. 2PACh. 16 - Prob. 3PACh. 16 - Prob. 4PACh. 16 - Prob. 5PACh. 16 - Prob. 6PACh. 16 - Prob. 7PACh. 16 - Prob. 8PACh. 16 - Prob. 9PACh. 16 - Sleek Sneakers Co. is one of many firms in the...
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Similar questions
- Monopolistically competitive firms use product differentiation to a.limit the number of firms in the industry. b.ensure long-run profits. c.achieve market power. d.block other firms from entering the industry.arrow_forwardIf a firm is operating in a monopolistically competitive market, then in the long run: A. the firm will maximize its profit by producing the output level at which the marginal revenue is minimized. B. the firm will earn zero economic profit. C. the firm will maximize its profit by producing the output level at which the average cost is minimized. D. all of the abovearrow_forwardWhich two curves in a monopolistically competitive market in the long run will be equal to each other due to firm entry and exit? a. marginal revenue curve and its total cost curve. b. marginal revenue curve and its average total cost curve. c. demand curve and its total cost curve. d. demand curve and its average total cost curve.arrow_forward
- 8. A monopolistically competitive firm has a: a. Highly elastic demand curve b. perfectly inelastic demand curve c. Highly inelastic demand curve d. perfectly elastic demand curvearrow_forwardIn monopolistic competition, a firm has some ability to affect the price for its product because of Select one a. economic profits. b.easy entry and exit. C. many competitors product differentlation.arrow_forwardMonopolistically competitive firms use product differentiation to Question 3Answer a. block other firms from entering the industry. b. limit the number of firms in the industry. c. ensure long-run profits. d. achieve market power.arrow_forward
- Which of the following conditions does NOT describe a firm in a monopolistically competitive market? a. It sells a product different from its competitors. b.It takes its price as given by market conditions. c. It maximizes profit both in the short run and in the long run. d.It has the freedom to enter or exit in the long run.arrow_forwardA profit-maximizing monopolistic competitor continues production until ________. a. marginal revenue exceeds average revenue b. marginal revenue exceeds marginal cost c. marginal revenue equals marginal cost d. marginal revenue equals average revenuearrow_forwardThe cost of producing a tube of tooth paste is $0.05. If the market for tooth paste is monopolistically competitive, a manufacturer who charges $0.05 for each bottle will ________. a. exit the industry in the long run b. earn zero economic profits in the short run c. incur a loss in the short run d. shut down production in the short runarrow_forward
- A monopolistically competitive firm will increase itsproduction ifa. marginal revenue is greater than marginal cost.b. marginal revenue is greater than average total cost.c. price is greater than marginal cost.d. price is greater than average total cost.arrow_forwardIn monopolistic competition,a firm produces 10,000 units when its marginal revenue equals its marginal cost. At this level of output, the firms average variable cost is $4.30 and its average fixed cost is $2.10. If the firm sells the product for $5 each, at best it is earning a. losses of $7,000. b. a profit of $7,000. c. losses of $14,000. d. a profit of $14,000. e. There is not enough information provided to answer this question.arrow_forwardFigure 16-2 This figure depicts a situation in a monopolistically competitive market. 100 90 80 70 60 50 40 30 20 10 MC MR ATC Demand 10 20 30 40 50 60 70 80 90 100 QUANTITY Refer to Figure 16-2. Assuming the firm is maximizing profit, this firm is operating a. in the short run and earning a positive economic profit. b. in the long run and incurring and economic loss. c. in the short run and breaking even. d. in the long run and earning a positive economic profit..arrow_forward
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