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What is the consequence of a firm in a competitive market
selling a homogenous product?
The firms capture some market power.
The product sold by one firm is a perfect substitute for the
products sold by other firms in the same industry.
All the firms in the industry are the same size.
The product sold by one firm is a perfect complement for the
products sold by other firms in the industry.
Firms in the industry can produce the same...
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Which of the following does NOT apply?
Monopolistically competitive firms
operate (produce) where marginal cost crosses marginal
revenue.
violate the efficiency conditions because they don’t produce the
maximum number of goods and services possible (not producing where
the average cost curve is at the bottom).
meet the conditions of equity, because all costs (including
opportunity costs) are under (or tangent to) the demand curve
(average revenue).
earn economic profit (economic rent, producer surplus) in the
long run.
2.)At long-run equilibrium...
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A monopolistically competitive firm that wishes to maximize profits will choose to produce that level of output where: Price of the good is equal to the marginal revenue of producing the last unit of the good Price of the good is equal to the marginal cost of producing the last unit of the good. Marginal revenue is equal to marginal cost. ATC is at the lowest point possible. An industry has eight firms with the following market shares: 5%, 20%,...
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1l. If a monopolistically competitive firm is incurring losses, then at the profit-max a price is above the average total cost curve. b. price is below the average total cost curve c. price is equal to marginal revenue. d. price is less than marginal revenue. e. average total cost equals marginal cost. Both competitive and monopolistically competitive firms a. can maximize profit by raising price. b. cannot control or set their own price c. can maximize profit by producing to...
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2. In a perfectly competitive market, there are initially economic profits. Firm entry causes the market supply curve to shift rightwards, but the market does not reach its long run state. a. Draw two corresponding graphs, side-by-side, that allustrate this shift. One is the market supply and demand graph, and the other is the profit-maximizing production choice of a typical firm. Using your graph, explain b. How do price and marginal revenue change as firms enter c. How do MC...
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These three questions please
Question 37 (1 point) Table 16-1 A monopolistically competitive firm faces the following demand curve for its product: Price (S) 10 4 8 7 6 16 8 10 5 12 4 14 3 16 2 18 20 1 Refer to Table 16-1. The firm has total fixed costs of $20 and a constant marginal cost of $5 per unit. What will the firm do? It will produce 2 units; firms will exit the market in the...
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The market for laundry detergent is monopolistically
competitive. Each firm owns one brand,
and each brand has effectively differentiated itself so that it has
some market power (i.e., faces a
downward sloping demand curve). Still, no brand earns economic
profits, because entry causes
the demand for each brand to shift in until the seller can just
break even. All firms have identical
cost functions, which are U-shaped.
(a) Is this market in long-term or short-term equilibrium? Explain
your claim?
Now...
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Exam 2 Principles of Microeconomics Winter 2020 (1) - Microsoft Word me Layout References Mailings Review Ink Tools Pens View E3 1 u - 12 AA Aa se *, * A .A. Font 2 2. АаВЫСc| AaBbcc АаВЫС Аавьсс Аав Аавьсct Аавьсср 1 Normal 1 No Spaci... Heading 1 Heading 2 Title Subtitle Subtle Em... Change Paragraph Styles Styles 13. What happens when firms in an industry are earning positive economic profits in the short run? A. New firms enter...
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20. Which of the following statements is not a
characteristic of a perfectly competitive firm?
a. Perfectly competitive firms view each other as fierce
rivals.
b. Firms are price-takers.
c. All firms produce a homogeneous product.
d. Perfectly competitive markets allow freedom of entry and
exit.
21. Since the firm’s demand curve is perfectly elastic
for a price-taking firm,
a. P = MR.
b. P = MRP.
c. P = TR.
d. both a and b.
e. both a and...
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The cost curve for a typical perfect competitive firm in the coffee market is given by the following TC 128+4g+2q The market demand curve for coffee is given by the following P=84-2q (a) (i) Find the long run competitive equilibrium. That is, identify the equilibrium price and quantity, output for each firm, the number of firms in the industry and the level of producer and consumer surplus. Show your answer in a clear well-labelled diagram (ii) What is the value...
A monopolistically competitive firm that wishes to maximize profits will choose to produce that level of output where: Price of the good is equal to the marginal revenue of producing the last unit of the good Price of the good is equal to the marginal cost of producing the last unit of the good. Marginal revenue is equal to marginal cost. ATC is at the lowest point possible. An industry has eight firms with the following market shares: 5%, 20%,...
1l. If a monopolistically competitive firm is incurring losses, then at the profit-max a price is above the average total cost curve. b. price is below the average total cost curve c. price is equal to marginal revenue. d. price is less than marginal revenue. e. average total cost equals marginal cost. Both competitive and monopolistically competitive firms a. can maximize profit by raising price. b. cannot control or set their own price c. can maximize profit by producing to...
2. In a perfectly competitive market, there are initially economic profits. Firm entry causes the market supply curve to shift rightwards, but the market does not reach its long run state. a. Draw two corresponding graphs, side-by-side, that allustrate this shift. One is the market supply and demand graph, and the other is the profit-maximizing production choice of a typical firm. Using your graph, explain b. How do price and marginal revenue change as firms enter c. How do MC...
These three questions please
Question 37 (1 point) Table 16-1 A monopolistically competitive firm faces the following demand curve for its product: Price (S) 10 4 8 7 6 16 8 10 5 12 4 14 3 16 2 18 20 1 Refer to Table 16-1. The firm has total fixed costs of $20 and a constant marginal cost of $5 per unit. What will the firm do? It will produce 2 units; firms will exit the market in the...
Exam 2 Principles of Microeconomics Winter 2020 (1) - Microsoft Word me Layout References Mailings Review Ink Tools Pens View E3 1 u - 12 AA Aa se *, * A .A. Font 2 2. АаВЫСc| AaBbcc АаВЫС Аавьсс Аав Аавьсct Аавьсср 1 Normal 1 No Spaci... Heading 1 Heading 2 Title Subtitle Subtle Em... Change Paragraph Styles Styles 13. What happens when firms in an industry are earning positive economic profits in the short run? A. New firms enter...
The cost curve for a typical perfect competitive firm in the coffee market is given by the following TC 128+4g+2q The market demand curve for coffee is given by the following P=84-2q (a) (i) Find the long run competitive equilibrium. That is, identify the equilibrium price and quantity, output for each firm, the number of firms in the industry and the level of producer and consumer surplus. Show your answer in a clear well-labelled diagram (ii) What is the value...