Which of the following does NOT apply? Monopolistically competitive firms operate (produce) where marginal cost crosses...
- Which of the following does NOT apply? Monopolistically competitive firms
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operate (produce) where marginal cost crosses marginal revenue. |
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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). |
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meet the conditions of equity, because all costs (including opportunity costs) are under (or tangent to) the demand curve (average revenue). |
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earn economic profit (economic rent, producer surplus) in the long run. |
2.)At long-run equilibrium in a monopolistically competitive industry the typical firm receives profits well in excess of its opportunity cost.
True
False
Homework Answers
Earn economic profit (economic rent, producer surplus) in the long run.
2) False.
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Which of the following does NOT apply?
Monopolistically competitive firms
operate (produce) where marginal cost crosses...
In the long run, a monopolistically competitive firm will O Produce where price equals average cost....
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
The monopolist chooses to produce: O at an inefficient outcome. where marginal cost equals marginal revenue....
The monopolist chooses to produce: O at an inefficient outcome. where marginal cost equals marginal revenue. at a lower quantity than the perfectly competitive firm. O All of these statements are true. In the short run, monopolistically competitive firms: will earn zero economic profits by acting like a monopolist. O can earn positive economic profits by acting like a perfectly competitive firm. will earn zero economic profits by acting like a perfectly competitive firm. can earn positive economic profits by...
Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph...
Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC) Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss.Given the profit-maximizing choice of output and price, the...
profit maximization occurs where a. marginal cost crosses marginal revenue b. marginal cost crosses average revenue...
profit maximization occurs where a. marginal cost crosses marginal revenue b. marginal cost crosses average revenue c. average variable cost crosses average revenue d. average variable cost crosses marginal revenue the main difference between the short run and long run is that: a. firms earn zero profits in the long run b. the long run always refers to a time period of one year or longer c. in the long run, only one variable can be fixed d. in the...
Which of the following is true with respect to a perfectly competitive firm? It will make...
Which of the following is true with respect to a perfectly competitive firm? It will make small economic profits always or go out of business A perfectly competitive firm has a perfectly inelastic demand curve At profit maximization the perfectly competitive firm operates where total revenue is maximized as well The perfectly competitive firms supply curve is its marginal cost curve above AVC All of the above are true with respect to a perfectly competitive firm Question 5 1 pts...
In comparing the long-run equilibrium of a monopolistically competitive firm and a perfectly competitive firm, which...
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
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...
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...
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...
A firm in a monopolistically competitive market makes no economic profit in the long run because...
A firm in a monopolistically competitive market makes no economic profit in the long run because a. long-run price will be equal to long run average cost. b. long-run price will be equal to long run marginal cost. c. long-run marginal cost will be equal to long run marginal revenue. d. long-run marginal cost will be too high to make any economic profit.
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
The monopolist chooses to produce: O at an inefficient outcome. where marginal cost equals marginal revenue. at a lower quantity than the perfectly competitive firm. O All of these statements are true. In the short run, monopolistically competitive firms: will earn zero economic profits by acting like a monopolist. O can earn positive economic profits by acting like a perfectly competitive firm. will earn zero economic profits by acting like a perfectly competitive firm. can earn positive economic profits by...
Which of the following is true with respect to a perfectly competitive firm? It will make small economic profits always or go out of business A perfectly competitive firm has a perfectly inelastic demand curve At profit maximization the perfectly competitive firm operates where total revenue is maximized as well The perfectly competitive firms supply curve is its marginal cost curve above AVC All of the above are true with respect to a perfectly competitive firm Question 5 1 pts...
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
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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