Homework Answers
Monopolistic competition market is a type in which
1.there are large number of buyers in the market .
2.products are slightly differentiated in terms of Shape, size colour, etc .
3.there are few barrier entry in the market .
In the short run, there is some sellers in the market but as in the long run the number of suppliers increases and which causes the market demand curve shift left because supply increases but the demand by consumer is not increasing at that rate and end up in earning economic profit as zero for new firms like in the perfect competitive market.
hence demand curve will still remain slope downloads even after the entry of new firms
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USING YOUR OWN WORDS FOR YOUR RESPONSE: Why does the demand curve facing a monopolistically competitive...
QUESTION 2 The demand curve faced by a monopolistically competitive firm is: flat. kinked. upward-sloping. downward-sloping...
QUESTION 2 The demand curve faced by a monopolistically competitive firm is: flat. kinked. upward-sloping. downward-sloping QUESTION 3 Without a product differentiation, the demand curve for a monopolistically competitive firm would look like that of: O a monopoly firm. O a perfectly competitive firm. an oligopoly firm. a duopoly firm. QUESTION 4 Aside from advertising, how can monopolistically competitive firms increase demand for their products?! government edict. increasing its price. decreasing its price. Increasing the number of locations where it...
Response Questions Part A To C A) USE YOUR OWN WORDS FOR YOUR RESPONSE: Explain how...
Response Questions Part A To C A) USE YOUR OWN WORDS FOR YOUR RESPONSE: Explain how economies of scale can be a barrier to entry. B) USE YOUR OWN WORDS FOR YOUR RESPONSE: How does the demand curve faced by a monopolist differ from the demand curve faced by a perfectly competitive firm? C) USE YOUR OWN WORDS FOR YOUR RESPONSE: Why is it impossible for a profit-maximizing monopolist to choose any price and any quantity it wishes?
USE YOUR OWN WORDS FOR YOUR RESPONSE: Explain why the marginal revenue curve for a monopolist lies below its demand cur...
USE YOUR OWN WORDS FOR YOUR RESPONSE: Explain why the marginal revenue curve for a monopolist lies below its demand curve, rather than coinciding with the demand curve, as is the case for a perfectly competitive firm. Is it ever possible for a monopolist's marginal revenue curve to coincide with its demand curve?
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.
3. Is monopolistic competition efficient? 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 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...
1. Which of the following is NOT a characteristic of a monopolistically competitive market?
1. Which of the following is NOT a characteristic of a monopolistically competitive market?A. many sellers.B. differentiated products.C. long-run economic profits.D. free entry and exit.2. Which of the following products is likely to be sold in a monopolistically competitive market?A. video games.B. breakfast cereal.E. beer.D. all of the above.3. Which of the following is true regarding the similarities and differences in monopolistic competition and monopoly?A. The monopolist faces a downward-sloping demand curve while the monopolistic competitor faces an elastic demand...
A monopolistically competitive firm faces the following demand curve for its product: 6 Price ($) Quantity...
A monopolistically competitive
firm faces the following demand curve for its product: 6 Price ($)
Quantity 10 2 9 4 8 6 7 8 5 12 4 14 3 16 2 18 1 20 10 Refer to the
Table. The firm has total fixed costs of $20 and a constant
marginal cost of $5 per unit. What will the firm do? a) It will
produce 2 units; firms will exit the market in the long run. b) It
will produce...
a) Why is a monopolistically competitive firm less efficient than a perfectly competitive firm? It produces...
a) Why is a monopolistically competitive firm less efficient than a perfectly competitive firm? It produces at an output that is lower than its minimum efficient scale (MES) It earns positive economic profits in the long run It deters entry of new firms by putting up entry barriers All of the answers are correct b) Suppose a monopolistically competitive firm has MC=4Q+5. Its demand is P=145-3Q and marginal revenue is MR=145-6Q. What is its profit-maximizing output level? 17 14 16...
Consider a monopolistically competitive firm facing an indirect demand curve given by P = 20 –...
Consider a monopolistically competitive firm facing an indirect demand curve given by P = 20 – 2Q. If the profit-maximizing price is 16, what is the marginal cost? a) $14 b) $10 c) $12 d) cannot be determined from the information given.
The perfectly competitive firm's demand curve is: Perfectly elastic. Relatively elastic Perfectly inelastic. Relatively inelastic Statement...
The perfectly competitive firm's demand curve is: Perfectly elastic. Relatively elastic Perfectly inelastic. Relatively inelastic Statement 1: In the long run, firms in a monopolistically competitive industry will be producing that quantity that maximize social surplus. Statement 2: In the long run, firms in a monopolistically competitive industry will be producing at the minimum of its ATC curve. Statement (1) is true; statement (2) is false. Statements (1) and (2) are both true. Statement (1) is false; statement (2) is...
Suppose that a firm produces baseball bats in a monopolistically competitive market. The following graph shows...
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...
QUESTION 2 The demand curve faced by a monopolistically competitive firm is: flat. kinked. upward-sloping. downward-sloping QUESTION 3 Without a product differentiation, the demand curve for a monopolistically competitive firm would look like that of: O a monopoly firm. O a perfectly competitive firm. an oligopoly firm. a duopoly firm. QUESTION 4 Aside from advertising, how can monopolistically competitive firms increase demand for their products?! government edict. increasing its price. decreasing its price. Increasing the number of locations where it...
Response Questions Part A To C A) USE YOUR OWN WORDS FOR YOUR RESPONSE: Explain how economies of scale can be a barrier to entry. B) USE YOUR OWN WORDS FOR YOUR RESPONSE: How does the demand curve faced by a monopolist differ from the demand curve faced by a perfectly competitive firm? C) USE YOUR OWN WORDS FOR YOUR RESPONSE: Why is it impossible for a profit-maximizing monopolist to choose any price and any quantity it wishes?
USE YOUR OWN WORDS FOR YOUR RESPONSE: Explain why the marginal revenue curve for a monopolist lies below its demand curve, rather than coinciding with the demand curve, as is the case for a perfectly competitive firm. Is it ever possible for a monopolist's marginal revenue curve to coincide with its demand curve?
A monopolistically competitive
firm faces the following demand curve for its product: 6 Price ($)
Quantity 10 2 9 4 8 6 7 8 5 12 4 14 3 16 2 18 1 20 10 Refer to the
Table. The firm has total fixed costs of $20 and a constant
marginal cost of $5 per unit. What will the firm do? a) It will
produce 2 units; firms will exit the market in the long run. b) It
will produce...
The perfectly competitive firm's demand curve is: Perfectly elastic. Relatively elastic Perfectly inelastic. Relatively inelastic Statement 1: In the long run, firms in a monopolistically competitive industry will be producing that quantity that maximize social surplus. Statement 2: In the long run, firms in a monopolistically competitive industry will be producing at the minimum of its ATC curve. Statement (1) is true; statement (2) is false. Statements (1) and (2) are both true. Statement (1) is false; statement (2) is...
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