In the long run, a monopolistically competitive firm will not produce at the output level that minimizes average cost because: Group of answer choices
demand is horizontal.
that would leave the firm with excess capacity.
Price is greater than MR at that output level.
MC is less than MR at that output level.
MC is greater than MR at that output level.
In the long run, a monopolistically competitive firm will not produce at the output level that minimizes average cost because that would leave the firm with excess capacity.
For a monopolistically competitive firm, ATC is greater than the minimum avg total cost, the quantity the firm produces in long run equillibrium is less than the efficient scale
In the long run, a monopolistically competitive firm will not produce at the output level that...
In the long run, a monopolistically competitive firm will O Produce where price equals average cost. Earn an economic profit O Produce a greater output level than would a perfectly competitive firm Suffer a loss because of its advertising budget
In the long run, firms in monopolistically competitive markets operate O A. at optimal capacity because they have perfectly elastic demand curves O B. with excess capacity because they face downward-sloping demand curves. O c. with excess capacity because they face perfectly elastic demand curves. OD. at optimal capacity because they face downward-sloping demand curves The figure to the right depicts the short run outcome for a firm in a monopolistically competitive industry To maximize profits this for should produce...
In comparing the long-run equilibrium of a monopolistically competitive firm and a perfectly competitive firm, which of the following is incorrect? Select one: a. they both produce at the minimum point of the average cost curve ob. the both produce at point where price equals average costs c. they both produce where MR = MC od. the both make zero economic profits e. none of the above. o
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...
Suppose there is a monopolistically competitive market with n identical firms, such that each firm produces the same quantity, q. Further, the market is in the monopolistically competitive long-run equilibrium. You are given the following: Inverse market demand: P 10-Q Total market output: Qnxq Marginal revenue: MR 10n+ 1)xq Total cost: C(q)-5+q Marginal cost: MC 2xq In long-run equilibrium, each firm earns zero economic profit. In long-run equilibrium, the number of firms, n, is and each firm produces units) of...
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...
In the long run, all of the firms in a perfectly competitive industry will: exit the industry if price is greater than average total cost. produce at an output level at which average total cost equals marginal cost. earn an economic profit greater than zero. O produce an output level at which price is greater than average total cost. Which statement about the differences between monopoly and perfect competition is INCORRECT? A monopoly will charge a higher price and produce...
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 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...
which of the following is not characteristic of a monopolistically competitive firm in a long-run equilibrium a price is equal to marginal cost b marginal revenue is equal to marginal cost c the firm has excess capacity d price is equal to average revenue
If a monopolistically competitive firm is producing the profit-maximizing level of output and is earning an economic profit in the short run: Select one: a. marginal revenue is less than marginal cost. b. price is less than average total costs. c. price is less than marginal cost. d. marginal revenue equals marginal cost.