7. Is monopolistic competition efficient?Suppose that a company operates in the monopolistically competitive market for rugby kits. The following graph shows the demand curve, marginalrevenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve for the firm.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 that cost.PRICE (Dolars per3822ESRR 210070200MO619 20ATCMR30 AS 50 40 70QUANTITY (Thousands of kits);Demand8100Mon Comp OutcomeMin Unit CostC en-Because this market is monopolistically competitive, you can tell that it is in long-run equilibrium by the fact that at the optimal quantity for eachfirm. Further, the quantity the firm produces in long-run equilibrium isthe efficient scale.True or False: This indicates that there is a markup on marginal cost in the market for kitsO TrueO FalseMonopolistically competitive markets may be socially inefficient due to the presence of too many or too few firms. The presence of theexternality implies that there is too little entry of new firms in the market.Save & ContinueContinue without saving

Monopolistic Competition is a market structure where there are a large number of buyers and sellers;…

Answered: Because this market is monopolistically…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The following graph represents a monopolistically competitive firm in long-run equilibrium. Place the black point (cross sign) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. Next, place the grey star on the graph to indicate the point where the LRAC reaches a minimum. PRICE PER UNIT (Dollars) 500 450 400 350 300 250 200 150 100 50 MC 0 0 50 LRAC MR Demand 100 150 200 250 300 350 400 450 500 QUANTITY (Units) Monopolistically Competitive Outcome Minimum of the LRAC The long-run equilibrium price is $ (Hint: Use the graph to find the numeric value of the price at equilibrium.) The long-run equilibrium quantity is units. The LRAC curve is at its minimum at a quantity of The long-run equilibrium price is units. the marginal cost of producing the equilibrium output. ?
Suppose that a company operates in the monopolistically competitive market for denim jackets. The following graph shows the demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve for the firm. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Nex place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with that cost. (?) PRICE (Dollars per jacket) 100 90 80 70 60 50 ATC 20 40 30 20 10 10 MC MR Demand 0 + + 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of jackets) Mon Comp Outcome Min Unit Cost at the optimal the efficient scale. Because this market is monopolistically competitive, you can tell that it is in long-run equilibrium by the fact that P= ATC quantity for each firm. Further, the quantity the firm produces in long-run equilibrium is True or False: This indicates…
encient? Suppose that a company operates in the monopolistically competitive market for electric razors. The following graph shows the demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve for the firm. 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 that cost. 3; 100 50 90 80 88 + 70 70 60 550 40 PRICE (Dollars per razor) 30 30 10 MC 20 20 0 10 10 ATC +. ? Mon Comp Outcome MR Demand 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of razors) Min Unit Cost
If this graph represents the market for Sonoran hotdogs in Tucson , which statement is true? A The market is monopolistically competitive and at its long run equilibrium B The market is a monopoly and firms are earning positive profits C The market is an oligopoly and firms are earning positive profits D The market is perfectly competitive and firms are suffering losses E The market is monopolistically competitive and not at its long run equilibrium
3. How short-run profit or losses induce entry or exit Citrus Scooters is a company that manufactures electric scooters in a monopolistically competitive market. The following graph shows the demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC) for Citrus. 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. PRICE (Dollars per scooter) 500 450 400 350 300 250 200 150 100 50 0 0 MC 50 100 ATC MR Demand 150 200 250 300 350 400 450 500 QUANTITY (Scooters) Monopolistically Competitive Outcome Given the profit-maximizing choice of output and price, Citrus Scooters is earning Profit or Loss sellers in the industry relative to the long-run equilibrium amount. profit, which means there are
The market for peanut butter in Nutville is monopolistically competitive and in long-run equilibrium. The following graph shows the marginal-cost (MC) curve and the average-total-cost (ATC) curve for a peanut-butter-producing firm. It also shows the demand curve and marginal-revenue (MR) curve faced by a firm operating in a monopolistically competitive environment. On the following graph, use the black point (plus symbol) to show the profit-maximizing output and price for a typical firm operating in a monopolistically competitive environment.
The market for peanut butter in Nutville is monopolistically competitive and in long-run equilibrium. The following graph shows the marginal-cost (MC) curve and the average-total-cost (ATC) curve for a peanut-butter-producing firm. It also shows the demand curve and marginal-revenue (MR) curve faced by a firm operating in a monopolistically competitive environment. On the following graph, use the black point (plus symbol) to show the profit-maximizing output and price for a typical firm operating in a monopolistically competitive environment. (? Demand Profit Max Under MC Perfect Comp. Outcome ATC MR Quantity One day, consumer advocate Skippy Jif discovers that all brands of peanut butter in Nutville are identical. Thereafter, the market becomes perfectly competitive and again reaches its long-run equilibrium. On the previous graph, use the grey point (star symbol) to show the market price in this case and the quantity produced by each firm. Which of the following statements are true…
#3) Draw a diagram of the long run equilibrium in a monopolistically competitive market. How is price related to average total cost? How is price related to marginal cost?
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. 500 450 Monopolistically Competitive Outcome 400 350 ATC Profit or Loss 300 250 200 150 100 50 0 PRICE (Dollars per bike) MC MR Demand 400 0 50 100 450 500 150 200 250 300 350 QUANTITY (Bikes) Given the profit-maximizing choice of output and price, the shop is making shops in the industry relative to the long-run equilibrium. Now consider the long run in which bike manufacturers are free to enter and exit the market. profit, which means there are
Suppose that a company operates in the monopolistically competitive market for denim jackets. The following graph shows the demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve for the firm. 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 that cost. ? 100 PRICE (Dollars per jacket) 8 20 60 50 X ATC 20 MC MR 2 2 2 2 10 0 0 30 40 50 60 70 QUANTITY (Thousands of jackets) 10 20 80 Demand 90 100 Mon Comp Outcome Min Unit Cost
Suppose that a company operates in the monopolistically competitive market for denim jackets. The following graph shows the demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve for the firm. 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 that cost. ? PRICE (Dollars per jacket) 100 90 80 70 60 40 30 20 MC 10 ATC MR Demand 0 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of jackets) + Mon Comp Outcome Min Unit Cost Because this market is monopolistically competitive, you can tell that it is in long-run equilibrium by the fact that. firm. Further, a monopolistically competitive firm's average total cost in long-run equilibrium is at the optimal quantity for each the minimum average total cost.
Use the following graph for a monopolistically competitive firm to answer the next question. Dollars (5) 22 32 0 10 20 35 45 50 Quantity of Output (Units) This monopolistically competitive firm is earning economic profits in the short run and ATC Multiple Choice will continue to have economic profits in the long run will earn only normal profits in the long run this will cause its demand curve to shift to the right in the long run. this will cause its cost curves to rise in the long run

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