Draw the long run equilibrium for both a perfect competitive market and Monopolistic Competitive market. Which...
- Draw the long run equilibrium for both a perfect competitive market and Monopolistic Competitive market. Which is efficient (Define and explain efficiency carefully). Should the inefficient market be regulated? Why or why not.
Homework Answers
Under the perfectly competitive market, price is decided by the demand and supply forces. Firm produces where price is equal to the marginal cost of production. Thus it is efficient level of output. All firms get only normal profit.
Under the monopolistic competition, firm also tends to attain normal profit or zero profit but firm does not operate at efficient level of output. Hence government can regulate market to achieve efficient level of output.
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Draw the long run equilibrium for both a perfect competitive
market and Monopolistic Competitive market. Which...
5. What firms in perfect competitive market and monopolistic competitive market have in common? How they...
5. What firms in perfect competitive market and monopolistic competitive market have in common? How they are different in the long run? Explain using appropriate graphs. 7. Earnings per share is calculated to le a) only for common shares. b) only for preferred shares. c) for common and preferred shares. d) only for bonds.
QUESTION 7 Monopolistic competitive firms in the long run earn: positive economic profits. zero pure economic...
QUESTION 7 Monopolistic competitive firms in the long run earn: positive economic profits. zero pure economic profits. negative economic profits. Positive, zero, or negative economic profits. QUESTION 8 Which of the following statements best describes firms under monopolistic competition? Profits will be positive in the long run. Price always equals average variable cost. In the long run, positive economic profit will be eliminated. Marginal revenue equals minimum average total cost in the short run. QUESTION 9 Which of the following...
In perfect competition as well as in monopolistic competition, a. profit is positive in a long-run...
In perfect competition as well as in monopolistic competition, a. profit is positive in a long-run equilibrium for each firm. b.entry and exit by firms are restricted. c. there are many firms in a single market. d. marginal revenue is equal to price for each firm. ECTION 22 Monopolistic competition differs from perfect competition because in monopolistically competitive markets a. all firms can eventually earn economic profits. b. each of the sellers offers a somewhat different product. C. strategic interactions...
2 - What is the short-term and long-term change to the long-run perfect competitive equilibrium as...
2 - What is the short-term and long-term change to the long-run perfect competitive equilibrium as a result of a negative shock to demand side of market (left shift of demand). Explain graphically and in plain English what next is going to happen in this market.
1. (5 marks) If an economy is in long-run equilibrium, then why is the short-run market...
1. (5 marks) If an economy is in long-run equilibrium, then why is the short-run market supply function not a horizontal line in the perfect competitive market? 2. (5 marks) Why is the equilibrium price in the monopolist market higher than the one in the perfectly competitive market although the condition MC=MR holds in both markets?
A monopolistic competitor in long-run equilibrium is like a perfect competitor in that A. zero economic...
A monopolistic competitor in long-run equilibrium is like a perfect competitor in that A. zero economic profits are made. B. price equals marginal cost. C. both produce at the minimum points of their average total cost curves. D. price is greater than marginal cost.
a. Draw a pair of diagram illustrating both Short-run and Long Run equilibrium of Chamberlinian monopolistic...
a. Draw a pair of diagram illustrating both Short-run and Long Run equilibrium of Chamberlinian monopolistic competition. The diagrams contain average cost, average variable cost, marginal cost, and marginal revenue curves and shade area that represents abnormal profit. Make your diagrams large and label all curves, axes, and points b. In the price-leadership-by-a-dominant-firm model: a. After the dominant firm sets the market price, what is the output-supply behavior of the remaining firms in the industry?
a. Draw a pair of diagram illustrating both Short-run and Long Run equilibrium of Chamberlinian monopolistic...
a. Draw a pair of diagram illustrating both Short-run and Long Run equilibrium of Chamberlinian monopolistic competition. The diagrams contain average cost, average variable cost, marginal cost, and marginal revenue curves and shade area that represents abnormal profit. Make your diagrams large and label all curves, axes, and points. b. In the price-leadership-by-a-dominant-firm model: a. After the dominant firm sets the market price, what is the output-supply behavior of the remaining firms in the industry?
QUESTION 1 Which of the following is not a characteristic of the monopolistic competition market structure?...
QUESTION 1 Which of the following is not a characteristic of the monopolistic competition market structure? Many sellers, each small in size relative to the overall market. Few sellers. Differentiated product. Easy, low-cost entry and exit. QUESTION 2 Which of the following is the best example of a monopolistic competitor? Wheat farmers. Restaurants. Air Canada. General Motors. QUESTION 3 In the long run, both monopolistic competition and perfect competition result in: a wide variety of brand-name choices for consumers. an...
a. Draw a pair of diagram illustrating both Short-run and Long Run equilibrium of Chamberlinian monopolistic...
a. Draw a pair of diagram illustrating both Short-run and Long Run equilibrium of Chamberlinian monopolistic competition. The diagrams contain average cost, average variable cost, marginal cost, and marginal revenue curves and shade area that represents abnormal profit. Make your diagrams large and label all curves, axes, and points (10 points). b. In the price-leadership-by-a-dominant-firm model: a. After the dominant firm sets the market price, what is the output-supply behavior of the remaining firms in the industry? (10 points)
5. What firms in perfect competitive market and monopolistic competitive market have in common? How they are different in the long run? Explain using appropriate graphs. 7. Earnings per share is calculated to le a) only for common shares. b) only for preferred shares. c) for common and preferred shares. d) only for bonds.
In perfect competition as well as in monopolistic competition, a. profit is positive in a long-run equilibrium for each firm. b.entry and exit by firms are restricted. c. there are many firms in a single market. d. marginal revenue is equal to price for each firm. ECTION 22 Monopolistic competition differs from perfect competition because in monopolistically competitive markets a. all firms can eventually earn economic profits. b. each of the sellers offers a somewhat different product. C. strategic interactions...
2 - What is the short-term and long-term change to the long-run perfect competitive equilibrium as a result of a negative shock to demand side of market (left shift of demand). Explain graphically and in plain English what next is going to happen in this market.
1. (5 marks) If an economy is in long-run equilibrium, then why is the short-run market supply function not a horizontal line in the perfect competitive market? 2. (5 marks) Why is the equilibrium price in the monopolist market higher than the one in the perfectly competitive market although the condition MC=MR holds in both markets?
a. Draw a pair of diagram illustrating both Short-run and Long Run equilibrium of Chamberlinian monopolistic competition. The diagrams contain average cost, average variable cost, marginal cost, and marginal revenue curves and shade area that represents abnormal profit. Make your diagrams large and label all curves, axes, and points (10 points). b. In the price-leadership-by-a-dominant-firm model: a. After the dominant firm sets the market price, what is the output-supply behavior of the remaining firms in the industry? (10 points)
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