Monopolistic competitive does not engage in price discrimination because it is not the sole producer of the product. when there are high fixed cost the average total cost is higher and it has nothing to do with demand function. Barriers to entry help in sustaining long run economic profits. Legal restrictions allow the firm to become a monopoly. The correct choice is product differentiation because by selling differentiated products manufacturer can establish brand image and have a market power due to which it can charge its own price according to the downward sloping demand function.
Select product differentiation.
The demand curve facing the individual monopolistic competitor is downward-sloping due to high fixed costs product...
The demand curve for the product of a monopolistic competitor is a. horizontal b. downward sloping c. unitary elastic d. vertical Which of the following is NOT a characteristic of monopolistic competition? a. barriers to entry into the market b. a significant number of sellers c. product differentiation d. advertising IN MICROECONOMICS
Explain based on product differentiation that firms face a downward sloping demand curve in monopolistic competition.
2. (Figure: Costs and Demand for a Monopolistic Competitor) Price $15.00 --- --- $10.00 --- - AC --- -- I mre -- Demand curve facing each firm, de Quantity 32 4 250 a)- The profit-maximizing amount of output produced will be: b) - What price should the firm charge? c) - The total cost of producing the profit-maximizing output is: d) - The profits for the firm are:
Consider a monopolist facing a straight line downward sloping demand curve. Suppose that the monopolist has constant marginal cost c>0 and wishes to maximise profit. At the optimal price and quantity choice, if the monopolist were to reduce its price marginally, the total revenue Select one: O a decreases. b. increases. O c. does not change. O d. Not enough information to determine.
18 | 1 point When facing a linear, downward-sloping inverse demand curve, the equilibrium from a non-collusive Cournot duopoly will happen on a less elastic portion of the demand curve than the equilibrium from a (successfully) collusive Cournot duopoly. O True O False
suppose that the market for product x is characterized by a typical, downward-sloping, linear demand curve and a typical , upward-sloping, linear supply curve. suppose the price of supply is 0.7. will the dead weight loss form a $3 tax per unit be smaller if the absolute value of the price elasticity of demand is 0.6 or if the absolute value of the price elasticity of demand is 1.5?
the answer is not D
If a given product has a diagonal downward-sloping demand curve, then Ed will: O vary throughout the range of the curve. O be the same at each point on the curve. O be more elastic with a lower price. O be identical to the slope of the demand curve.
Suppose a firm has market power and faces a downward-sloping demand curve for its product, and its marginal cost curve is upward sloping. If the firm reduces its price, then A. producer surplus increases due to new buyers, but the producer surplus from existing customers declines due to the lower price. B. the sum of producer and consumer surplus remains the same, but surplus value is transferred from the producer to consumers. C. the change in producer surplus is transferred...
in a market with an upward sloping supply curve and a downward sloping demand curve, when there is an excess supply, a. b. c. The actual price must be higher that the equilibrium price. The actual price must be lower that the equilibrium price. The quantity demanded is higher than the equilibrium quantity.
3. Suppose a straight-line, downward-sloping demand curve shifts right due to an increase in consumer preferences. Is the price elasticity of demand higher, lower, or the same between any two prices on the new (higher) demand curve than on the old (lower) demand curve?