1. Conditions for monopolistic competition Consider the monopolistically competitive market structure, which has some features of a competitive market and some features of a monopoly. Complete the following table by indicating if each attribute characterizes a competitive market, a monopolistically competitive market, both, or neither. Check all that apply. Attributes Free entry Price equals average total cost in the long run Few sellers Price is equal to marginal cost Competitive Market Monopolistically Competitive Market 0 0 D 0 00 0

1. Conditions for monopolistic competition Consider the monopolistically competitive market structure, which has some features of a competitive market and some features of a monopoly. Complete the following table by indicating if each attribute characterizes a competitive market, a monopolistically competitive market, both, or neither. Check all that apply. Attributes Free entry Price equals average total cost in the long run Few sellers Price is equal to marginal cost Competitive Market Monopolistically Competitive Market 0 0 D 0 00 0

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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ls uccess Tips ■ccess Tips NOUT Actumpto Koup the Highest/3 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 that cost. PRICE (Dollars par bat) 80 70 60 20 MO о о 10 20 40 ATC 60 QUANTITY (Thousands of bas) Demand Man Camp Outcome Min Unit Cost Because this market is a monopolistically competitive market, you can tell that it is in long-run equilibrium by the fact that optimal quantity. Furthermore, the quantity the firm produces in long-run equilibrium is average total cost. at the the quantity at which…
2. "The competition commission investigated the high data prices in South Africa in 2017. The report, which was presented two years later, found that the data services market is "highly concentrated" with a duopoly of the leading cell phone operators - MTN and Vodacom".Based on the paragraph given above, which of the statements is CORRECT?A. Highly concentrated market benefits consumers as they have many, many choices available to them.B. Highly concentrated market restricts consumer welfareC. Highly concentrated market is an excellent reason for government to reduce regulationD. Highly concentrated market increases consumer welfare
Σ 00 Help The table below shows the total cost (TC) and marginal cost (MC) for Choco Lovers, a monopolistic firm producing different quantities of chocolate gift boxes. Fill in the blanks in the table. Total Quantity Price Total Cost Marginal Cost Marginal Revenue Revenue $20 $30 25 475 230 $8 540 267.5 7.5 13 35 17 307.5 11 40 45 640 352.5 6. 11 15 675 14 472.5 13 5. Instructions: Enter your answers as whole numbers. For profit, round your answer to 2 decimal places. Profit-maximizing quantity = %3D Profit-maximizing price = %3D Profit = %3D 2 68°F Mostly clear nere to search 直 0 L Profile Ball®1.0 F6 F5 F4 F2 F1 & V 24 4 23 5. 3. 2. T R B C. Alt
Exercise A.2. Point out the basic characteristics that define monopolistic competition and indicate the inefficiencies of this market structure.
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1. If the demand for a good increases at the same time as the supply of the same good decreases, what will happen to the equilibrium price and quantity of the good? Explain. 2. What is the deadweight loss of monopoly? Show the deadweight loss when the monopolist can perfectly price discriminate. 3. What is the point of long run equilibrium of a monopolistically competitive firm. How does it compare to a competitive firm.
1. Briefly discuss the various ways monopolistically competitive firms can differentiate their products? 2. In the long-run, a perfectly competitive firm will earn what kind of economic profit?
3 Of 16 a. A monopolistic competitor, much like a firm in perfect b. Advertising can play a role as an indirect signal of competition, sells its product at a point product quality to customers. where the price is equal to the marginal cost. true false true O false c. Monopolistically competitive industries are more likely d. In the long run, monopolistic competitors make a to make use of advertising to create products that catch similar amount of profit to monopolists, since, in both on in mainstream popularity than industries in perfect cases, the firm's demand curves are downward sloping, competition. and at the profit maximizing point, the marginal cost is true false equal to the marginal revenue. O true O false e. In the short term, a monopolistic competitor will make a profit if the demand curve is above the average total cost curve at some point. true false
5. We are more tolerant of the deadweight loss from monopolistic competition than that of monopoly because monopolistically competitive firms Have a smaller deadweight loss Make zero profit in the long run Charge less than the profit-maximizing price Produce a differentiated product а. b. C. d.
1. Why does the model of monopolistic competition does it have that name?
es Mailings Review View Help a v v Po E-E-FEAT 也。 Paragraph rrice and cost Jaollars per uni 80 60 40 20 ity: Investigate V D 0 20 40 60 80 100 Quantity (units per week) 27) Refer to Figure 13.2.2. To maximize economic profit, this firm in monopolistic competition charges a price of ? 28) Refer to Figure 13.2.2. To maximize economic profit, this firm in monopolistic competition produces an output of? 29) Refer to Figure 13.2.2. This firm in monopolistic competition A) is incurring an economic loss. B) is in long-run equilibrium. C) is making an economic profit. D) must raise its price to maximize economic profit. E) will make more economic profit in the long run. (DELL) O O J MR MC Normal ATC No Spacing Styles Heading 1
1. Conditions for monopolistic competition Consider the monopolistically competitive market structure, which has some features of a competitive market and some features of a monopoly. Complete the following table by indicating if each attribute characterizes a competitive market, a monopolistically competitive market, both, or neither. Check all that apply. Attributes Price equals average total cost in the long run Free entry few sellers Many sellers Competitive Market Monopolistically Competitive Market