1. What is "monopolistic" about monopolistic competition? What is "competitive" about monopolistic competition? Please explain. 2....
Homework Answers
1. Like a monopoly, monopolistic competitive firms face a downward sloping demand curve which means they can sell more output by lowering the price. The demand curve is elastic. Profit maximization occurs at the intersection of MR and MC.
Like a competitive firm, there are a large number of sellers and no one seller can influence the price much. The products sold are close substitutes. No seller can dictate terms in the market.
There is free entry and exit in a monopolistic competitive market. This is like a competitive market.
2, No, a monopolistically competitive firm cannot earn positive profits in the long run. In the long run, a monopolistic competitive firm can only earn normal profits as firms will enter the industry.
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What is "monopolistic" about monopolistic competition? What is
"competitive" about monopolistic competition? Please explain.
2....
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...
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...
Now that you have studied monopolistic competition, let's see how well you can distinguish a firm in a monopolistically competitive market from a firm in a perfectly competitive market. Given the description of the firm below, decide whether it applies to
Now that you have studied monopolistic competition, let's see how well you can distinguish a firm in a monopolistically competitive market from a firm in a perfectly competitive market. Given the description of the firm below, decide whether it applies to monopolistic competition, perfect competition, or both. You may have to adjust the scroll bar to see the complete list.Items (9 items) (Drag and drop into the appropriate area below)a firm that may earn an economic profit or loss in the short...
One thing that makes monopolistic competition similar to perfect competition is that, in the a short...
One thing that makes monopolistic competition similar to perfect competition is that, in the a short run, neither can earn positive economic profit. b long run, both are guaranteed positive economic profit. c long run, both will earn zero economic profit. d short run, both are guaranteed positive economic profit. e long run, both could earn positive economic profit, but monopolistic competitors will earn more than perfect competitors. Refer to the following graph to answer the following questions: In the...
4. Is monopolistic competition efficient? Suppose that a firm produces polo shirts in a monopolistically competitive...
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...
How is it determined for pure competition and monopolistic competition whether the firm is operating in...
How is it determined for pure competition and monopolistic competition whether the firm is operating in the short-run or the long-run? While the demand curve for the monopoly and monopolistically competitive firm appear the same, they do differ when it comes to the elasticity of both. Which one of the two demand curves will be more elastic? Explain why.
QUESTION 5 A monopolistically competitive firm will: maximize profits by producing where MR = MC. not...
QUESTION 5 A monopolistically competitive firm will: maximize profits by producing where MR = MC. not likely earn an economic profit in the long run. shut down in the short run if price is less than average variable cost. all of the above. QUESTION 6 A monopolistic competitive firm is inefficient because the firm: earns positive economic profit in the long run. is producing at an output corresponding to the condition that marginal cost equals price. is not maximizing its...
MULTIPLE CHOICE A monopolistically competitive firm: a.Can expect to earn zero economic profits in the long-run....
MULTIPLE CHOICE A monopolistically competitive firm: a.Can expect to earn zero economic profits in the long-run. b.Has the power to set its own price. c.Produces a product that is different from that of its competitors. d.All of the above are features of monopolistic competition. Please explain. Thank you!
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...
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...
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