Homework Answers
According to the given scenario that the marginal revenue of the the monopolistically competitive firm is actually less than that of perfectly competitive firm because in the perfectly competitive firm the price is always equal to the marginal revenue while in the monopolistically competitive firm the price is always greater than the marginal revenue and in the given case the marginal revenue of the perfect competition is equal to price which is $15, and marginal revenue and monopolistically competitive firm is $10 and the quantity is less than that of perfect competition and as far as the profit is concerned both earn normal profit
Therefore (b) is the answer to this question
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Quest Exhibit 10-2 A monopolistic competitive firm Price, costs, and revenue (dollars) 10 100 200 300...
Exhibit 10-3 A monopolistic competitive firm in the long run LRAC Price, costs, and revenue (dollars)...
Exhibit 10-3 A monopolistic competitive firm in the long run LRAC Price, costs, and revenue (dollars) 0 200 400 600 800 1,000 Quantity of output (units per week) As presented in Exhibit 10-3, the long-run profit- maximizing output for the monopolistic competitive firm is: zero units per week. 200 units per week. 400 units per week. 600 units per week. 800 units per week
Exhibit 10-1 A monopolistic competitive firm Price, costs, and revenue (dollars) 10 0 200 1,000 400...
Exhibit 10-1 A monopolistic competitive firm Price, costs, and revenue (dollars) 10 0 200 1,000 400 600 800 Quantity of output (units per day) If all firms in the industry are the same as the monopolistic competitive firm shown in this Exhibit 10-1, firms in the long run will: a. leave the industry, b. experience less competition because firms will exit the industry c experience competition from new firms that enter the industry, d. earn positive economic profits.
Question 73 3.75 pts Exhibit 10-3 A monopolistic competitive firm in the long run MC 40...
Question 73 3.75 pts Exhibit 10-3 A monopolistic competitive firm in the long run MC 40 LRAC 30 Price, costs, and revenue (dollars) 20 10 MR 0 200 400 600 800 1.000 Quantity of output (units per week) To maximize long-run prohts, the monopolistically competitive firm shown in Exhibit 10-3 will charge a price per unit of: $10 $30 $40. $20. zero
3. Unlike a perfectly competitive firm, the monopolistic competitive firm is able to (a little) control...
3. Unlike a perfectly competitive firm, the monopolistic competitive firm is able to (a little) control price. Discuss, why, the position of the firm in the long run, is similar to that of a perfectly competitive one. 4. List the characteristics of a monopolistically competitive market structure. 5. Describe the firm's decision in choosing the profit maximizing or loss minimizing level of output. Illustrate.
4. Is monopolistic competition efficient? Suppose that a firm produces polo shirts in a monopolistically competitive...
4. Is monopolistic competition efficient? Suppose that a firm produces polo shirts in a monopolistically competitive market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity...
The graph below is for a profit-maximizing firm in monopolistic competition. Place point A at the...
The graph below is for a profit-maximizing firm in monopolistic competition. Place point A at the firm's output and price combination. Place point B at the firm's output and price combination if it were in a perfectly competitive industry. Then answer the questions. 10 9. ATC 4. 2. MR Demand 4. 10 Quantity What will average total cost be for the monopolistically What will long-run output be for the monopolistically competitive firm? competitive firm? units What will average total cost...
4. Is monopolistic competition efficient? Suppose that a firm produces wool jackets in a monopolistically competitive...
4. Is monopolistic competition efficient? Suppose that a firm produces wool jackets in a monopolistically competitive market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity...
Price ($) 320 200 - ATC 2) Monopolistic Competition II (7 points) The graph to the...
Price ($) 320 200 - ATC 2) Monopolistic Competition II (7 points) The graph to the right shows cost curves, demand, and marginal revenue for a popular cell phone producer in a monopolistically competitive market. a. What is the firm's profit maximizing output level? b. What price will the firm charge? C. Suppose the firm produces in the short run. Will it earn a profit? How do you know? d. What is the firm's profit (or loss) per-unit? e. What...
The graph below is for a profit-maximizing firm in monopolistic competition. Place point A at the...
The graph below is for a profit-maximizing firm in monopolistic competition. Place point A at the firm's output and price combination. Place point B at the firm's output and price combination if it were in a perfectly competitive industry. Then answer the questions. 10 MC 9 A B 8 ATC 7 6 5 4 نيا 2 1 MR Demand 0 0 1 3 6 7 00 N 9 10 4 5 Quantity What will average total cost be for the...
3) Monopolistic Competition Long-Run (7 points) The marginal costs (MC), average variable costs (AVC), and average...
3) Monopolistic Competition Long-Run (7 points) The marginal costs (MC), average variable costs (AVC), and average total costs (ATC) for a monopolistically competitive firm are shown in the figure below. Price/Cost (S) a. What is the firm's profit-maximizing output level? b. What is its profit-maximizing price? c. What is the firm's economic profit? d. What would the output level be that is productively efficient (minimizes ATC)? e. At what price and output level would this outcome be allocatively efficient? (Hint...
Exhibit 10-3 A monopolistic competitive firm in the long run LRAC Price, costs, and revenue (dollars) 0 200 400 600 800 1,000 Quantity of output (units per week) As presented in Exhibit 10-3, the long-run profit- maximizing output for the monopolistic competitive firm is: zero units per week. 200 units per week. 400 units per week. 600 units per week. 800 units per week
Exhibit 10-1 A monopolistic competitive firm Price, costs, and revenue (dollars) 10 0 200 1,000 400 600 800 Quantity of output (units per day) If all firms in the industry are the same as the monopolistic competitive firm shown in this Exhibit 10-1, firms in the long run will: a. leave the industry, b. experience less competition because firms will exit the industry c experience competition from new firms that enter the industry, d. earn positive economic profits.
Question 73 3.75 pts Exhibit 10-3 A monopolistic competitive firm in the long run MC 40 LRAC 30 Price, costs, and revenue (dollars) 20 10 MR 0 200 400 600 800 1.000 Quantity of output (units per week) To maximize long-run prohts, the monopolistically competitive firm shown in Exhibit 10-3 will charge a price per unit of: $10 $30 $40. $20. zero
3. Unlike a perfectly competitive firm, the monopolistic competitive firm is able to (a little) control price. Discuss, why, the position of the firm in the long run, is similar to that of a perfectly competitive one. 4. List the characteristics of a monopolistically competitive market structure. 5. Describe the firm's decision in choosing the profit maximizing or loss minimizing level of output. Illustrate.
4. Is monopolistic competition efficient? Suppose that a firm produces polo shirts in a monopolistically competitive market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity...
The graph below is for a profit-maximizing firm in monopolistic competition. Place point A at the firm's output and price combination. Place point B at the firm's output and price combination if it were in a perfectly competitive industry. Then answer the questions. 10 9. ATC 4. 2. MR Demand 4. 10 Quantity What will average total cost be for the monopolistically What will long-run output be for the monopolistically competitive firm? competitive firm? units What will average total cost...
4. Is monopolistic competition efficient? Suppose that a firm produces wool jackets in a monopolistically competitive market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity...
Price ($) 320 200 - ATC 2) Monopolistic Competition II (7 points) The graph to the right shows cost curves, demand, and marginal revenue for a popular cell phone producer in a monopolistically competitive market. a. What is the firm's profit maximizing output level? b. What price will the firm charge? C. Suppose the firm produces in the short run. Will it earn a profit? How do you know? d. What is the firm's profit (or loss) per-unit? e. What...
The graph below is for a profit-maximizing firm in monopolistic competition. Place point A at the firm's output and price combination. Place point B at the firm's output and price combination if it were in a perfectly competitive industry. Then answer the questions. 10 MC 9 A B 8 ATC 7 6 5 4 نيا 2 1 MR Demand 0 0 1 3 6 7 00 N 9 10 4 5 Quantity What will average total cost be for the...
3) Monopolistic Competition Long-Run (7 points) The marginal costs (MC), average variable costs (AVC), and average total costs (ATC) for a monopolistically competitive firm are shown in the figure below. Price/Cost (S) a. What is the firm's profit-maximizing output level? b. What is its profit-maximizing price? c. What is the firm's economic profit? d. What would the output level be that is productively efficient (minimizes ATC)? e. At what price and output level would this outcome be allocatively efficient? (Hint...
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