(1) Entry into and exit from a perfectly competitive industry will Drive price to minimum Long-Run AVC Produce economic losses for entering firms Allow efficient managers to earn economic profits Drive price to minimum Long-Run ATC
(1) Entry into and exit from a perfectly competitive industry will Drive price to minimum Long-Run AVC Produce economic losses for entering firms Allow efficient managers to earn economic profits Drive price to minimum Long-Run ATC
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter10: Monopolistic Competition And Oligopoly
Section: Chapter Questions
Problem 11PAE
Related questions
Question
(1) Entry into and exit from a
- Drive
price to minimum Long-RunAVC - Produce economic losses for entering firms
- Allow efficient managers to earn economic profits
- Drive price to minimum Long-Run ATC
(2) Positive Economic Profits are
- A long-run operating condition necessary for a monopolist
- Profits above what it takes to keep the entrepreneur in that business
- Equal to
producer surplus - Equal to the markup of price over
Average Total Cost
(3)
- The demand
curves facing firms are perfectly price inelastic - Each firm has a strategy for how they will react to other firms’ price or quantity
- Entry and exit is not permitted
- Firms differentiate the characteristics of their product
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