Homework Answers
In the monopolistic market setup, equilibrium occurs when MR= MC.
From the graph, it can be observed that MR is equal to MC when output Q = 50 and the corresponding price on the demand curve is $23.
However at the equilibrium, the per unit average cost is 25 which is greater than the price.
It implies that TR less than TC and firm makes losses. So, firms will exit from the industry and hence option D is correct
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In the long run in this monopolistically competitive sweatshirt industry, MC ATC O A. all firms...
Suppose that firms in a monopolistically competitive industry are making positive profits in the short run....
Suppose that firms in a monopolistically competitive industry are making positive profits in the short run. Select the correct answers below to describe what will happen in this industry in the long run. Since profits are greater than zero, firms will enter/exit As this occurs, demand for each firm will, increase/decrease/stay the same This will continue until, profits increase/decrease/equal zero At this point, P=ATC/P=MR/P=MC
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MC ATC MC ATC -D MR MR 0 0 (b) MC ATC D MR (c) 65. Refer to the above diagrams, which pertain to monopolistically competitive firms. Short-run equilibrium entailing economic loss is shown by: A) diagram a only. B) diagram b only. C) diagram conly. D) both diagrams a and c. 66. Refer to the above diagrams, which pertain to monopolistically competitive firms. A short-run equilibrium entailing economic profits is shown by: A) diagram a only. B) diagram b...
In the long run, firms in monopolistically competitive markets operate O A. at optimal capacity because...
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QUESTION 6 In the short run, a monopolistically competitive firm. O makes profits just as it...
QUESTION 6 In the short run, a monopolistically competitive firm. O makes profits just as it does in the long run because of barriers to entry O will earn zero economic because of free entry and exit. O produces where MR-MC O produces where PEMC QUESTION 7 In the long run, a monopolistically competitive firm: O makes profits just as it does in the short run because of barriers to entry will earn zero economic because of free entry and...
FICE 150 firms in the monopolistically competitive industry. Price is above marginal revenue, as a general...
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MC ATC MC ATC -D MR MR 0 0 (b) MC ATC D MR (c) 65. Refer to the above diagrams, which pertain to monopolistically competitive firms. Short-run equilibrium entailing economic loss is shown by: A) diagram a only. B) diagram b only. C) diagram conly. D) both diagrams a and c. 66. Refer to the above diagrams, which pertain to monopolistically competitive firms. A short-run equilibrium entailing economic profits is shown by: A) diagram a only. B) diagram b...
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...
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QUESTION 6 In the short run, a monopolistically competitive firm. O makes profits just as it does in the long run because of barriers to entry O will earn zero economic because of free entry and exit. O produces where MR-MC O produces where PEMC QUESTION 7 In the long run, a monopolistically competitive firm: O makes profits just as it does in the short run because of barriers to entry will earn zero economic because of free entry and...
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