Homework Answers
Point A is wrong. Monopolistic competition firm produces where MC =MR. That is at Point (4,5) where Price= $5, quantity= 4.
Point B is wrong. Perfectly competitive firm Produces where P=MC. That is at point (5.5,3.5) where price= $3.5 quantity=5.5.
1. ATC for monopolist competition firm= $5
Reason- ATC at Q= 4 is $5
2. ATC for perfect competition= $4
Reason- ATC when Q= 5.5 is $4
3. Long run output for monopolist competition is at MR=MC, P=D=ATC at Q= 4.
5. Long run output for perfect competition is at the lowest point of average total cost. That is at Q=6 units
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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...
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...
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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...
1. Is monopolistic competition efficient? Suppose that a firm produces wooden train engines in a monopolistically...
1. Is monopolistic competition efficient? Suppose that a firm produces wooden train engines 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 quan tity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and...
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...
4. Is monopolistic competition efficient? Suppose that a firm produces wool jackets in a monopolistically competitive...
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Price ($) 320 200 - ATC 2) Monopolistic Competition II (7 points) The graph to the...
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Question 7 5 pts Let's say that you know the following information for an oligopoly firm:...
Question 7 5 pts Let's say that you know the following information for an oligopoly firm: Total Revenue equals $200 million. Variable Costs are $170 million. Fixed Costs equal $20 million. The firm is currently producing 2,000 products at the MC = MR point (and the MC curve is rising). What recommendation do you have for this firm? Assuming the firm's costs remain the same, the firm should produce fewer products in order to decrease its marginal costs. The profit...
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Suppose that a firm produces baseball bats 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 block 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 associated with that cost.Because this market...
2. Greater than, equal to, less than Place a black point (plus symbol) on the graph to indicate the long-run monopolis...
2. Greater than, equal to,
less than
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 associated with that cost. Mon Comp Outcome Min Unit Cost PRICE (Dollars per jacket) ATC МС - P > ATC MR Demand 0 10 90 100 MR = MC 20 30...
Perfect Competition Competition Monopolistic Monopoly Oligopoly Goal of firmsMaximize Profit Rule...
how would you fill out this graph?
Perfect Competition Competition Monopolistic Monopoly Oligopoly Goal of firmsMaximize Profit Rule for maximizing profit MR-MC Can earn economic profits in the short run? Yes Can earn economic profits in the long run? Yes Price taker? Sometimes P2MC Sometimes Price & MC Produces welfare maximizing output? Number of firms? Few 3. (1 point) Consider a world where only blank t-shirts are produced. Draw hypothetical Demand faced by a firm, MR, MC, and ATC curves...
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...
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...
1. Is monopolistic competition efficient? Suppose that a firm produces wooden train engines 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 quan tity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and...
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...
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...
Question 7 5 pts Let's say that you know the following information for an oligopoly firm: Total Revenue equals $200 million. Variable Costs are $170 million. Fixed Costs equal $20 million. The firm is currently producing 2,000 products at the MC = MR point (and the MC curve is rising). What recommendation do you have for this firm? Assuming the firm's costs remain the same, the firm should produce fewer products in order to decrease its marginal costs. The profit...
2. Greater than, equal to,
less than
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 associated with that cost. Mon Comp Outcome Min Unit Cost PRICE (Dollars per jacket) ATC МС - P > ATC MR Demand 0 10 90 100 MR = MC 20 30...
how would you fill out this graph?
Perfect Competition Competition Monopolistic Monopoly Oligopoly Goal of firmsMaximize Profit Rule for maximizing profit MR-MC Can earn economic profits in the short run? Yes Can earn economic profits in the long run? Yes Price taker? Sometimes P2MC Sometimes Price & MC Produces welfare maximizing output? Number of firms? Few 3. (1 point) Consider a world where only blank t-shirts are produced. Draw hypothetical Demand faced by a firm, MR, MC, and ATC curves...
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