4. A conceptual difference between a firm operating in a perfectly competitive market and a firm operating in a monopolistically competitive market is that: a) In the long run, the firm operating in a perfectly competitive market makes smaller profits than the firm operating in a monopolistically competitive one. b) If economic profits are being made, the firm in the perfectly competitive market will face entry of new firms whereas the firm in the monopolistically competitive one will not. c) None of the other answers. d) The firm in the perfectly competitive market faces a horizontal demand curve, whereas the firm in the monopolistically competitive market faces a downward sloping demand curve. e) In the long run equilibrium, the firm in the perfectly competitive market is onerating where

4. A conceptual difference between a firm operating in a perfectly competitive market and a firm operating in a monopolistically competitive market is that: a) In the long run, the firm operating in a perfectly competitive market makes smaller profits than the firm operating in a monopolistically competitive one. b) If economic profits are being made, the firm in the perfectly competitive market will face entry of new firms whereas the firm in the monopolistically competitive one will not. c) None of the other answers. d) The firm in the perfectly competitive market faces a horizontal demand curve, whereas the firm in the monopolistically competitive market faces a downward sloping demand curve. e) In the long run equilibrium, the firm in the perfectly competitive market is onerating where

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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3 please quickly thanks ! Which of the following features likely exist in both monopolistic competitive and purely competitive industries? A. Both have a standardized product B. Both markets emphasize on nonprice competition. C. Both industries have low barriers to entry D. Individual firms in both industries face a perfectly elastic demand curve
1. Suppose we live in a world where the widgets market is a monopolistically competitive market with homogenous firms (i.e. no productivity differences among firms). There are two countries: A and B. In each country, consumer demand for widgets can be written as Q = S x- x (P – P), 30 where n is the number of widget firms, P the price of widget charged by the firm, and P the average price of widget by other firms in the market. Moreover, widget firms in both countries have the same total cost function, which is C = 750 + (5 × Q). It is also given that marginal revenue of each 30Q firm can be written as MR = P – Total demand for widget in country A is SA = 900 and Sg = 1600 in country В. a) Derive the average cost function from the total cost function. What is the marginal cost? b) Calculate the number of firms and the prices of widget in each country when trade is not allowed (that is, calculate na, ng, Pa, PBÌ- c) Calculate the number of firms and the price of widget in the unified…
4. Study Questions and Problems #4 Consider this statement: "Because price equals long-run average cost and profits are zero, a monopolistically competitive firm is efficient." Do you agree or disagree? Agree, because a monopolistically competitive firm produces a socially optimal output. Disagree, because a monopolistically competitive firm does not produce enough output from a socially optimal point of view. Disagree, because a monopolistically competitive firm produces too much output from a socially optimal point of view.
1.How short-run profit or losses induce entry or exit 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).on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. PLEASE HELP ME
(Figure: The Market for Designer Boots in Monopolistic Competition IV) Use Figure: The Market for Designer Boots in Monopolistic Competition. A positive economic profit will be earned if the profit-maximizing price is in panel Price, cost XXX G; (A) H; (B) (a) O I; (C) O F; (A) ATC Quantity (per period) Price, (b) cost ATC Quantity (per period) Price, (c) cost ATC Quantity (per period)
22. Monopolistic competitive firms are productively inefficient because production occurs where: A) Marginal cost is greater than marginal revenue B) Marginal cost is less than marginal revenue C) Average total cost is greater than the minimum average total cost D) Average total cost is less than the difference between average total cost and average variable cost
Monopolistically competitive firms can earn above-normal economic profits in the short run. (a) In a few sentences, explain what will happen in the long run that will prevent monopolistically competitive firms from continuing to earn above-normal economic profits.
2. The market for dark chocolate us characterized by Cournot duopolists - Honeydukes and Wonka industries. The market demand for dark chocolate is:P = 8 - 0.005Qdwhere P is the price per bar in dollars and Qd is dark chocolate's daily quantity demanded in bars (use qh to represent the quantity of dark chocolate sold by Honeydukes and qw to represent the quantity of dark chocolate sold by Wonka Industries). Honeydukes has a constant marginal cost of $2.50 per bar, while Wonka Industries has a constant marginal cost of $3.00 per bar. The firms move simultaneously in choosing their profit-maximizing quantity of output.a. Given the firms move simultaneously, what is the equation for Honeydukes' reaction function with qh expressed as a function of qw?b. Given the firms move simultaneously, what is the equation for Wonka's reaction function with qw expressed as a function of qh?c. What quantity of dark chocolate will each firm produce in equilibrium and what price will be established for a…
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.
4. Is monopolistic competition efficient? Suppose that a company operates in the monopolistically competitive market for pickleball paddles. 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 paddle) 100 R 60 50 40 30 20 10 0 0 MC ATC MR 10 20 30 40 50 60 QUANTITY (Thousands of paddies) 70 Demand 80 90 100 + 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 at the optimal quantity for each firm. Further, a monopolistically competitive firm's average total cost in long-run equilibrium is…
3. Is monopolistic competition efficient? Suppose that a firm produces wooden train engines 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 per engine) 100 90 80 70 60 50 40 30 20 10 MC ATC MR 0 + Demand H 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of engines) Mon Comp 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 for each firm. Furthermore, the quantity the firm produces in long-run equilibrium is True or False: This indicates…
5. 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 (Depar 500 450 350 300 250 300 150 100 MC 50 50 100 ATC MR Demand 150 200 250 300 350 400 450 500 QUANTITY (Scooters) +- Monopolically Comp Profit or Lasa ▼profit, which means there are Given the profit-maximizing choice of output and price, Citrus Scooters is earning sellers in the industry relative to the long-run equilibrium amount. Now consider the long run in which scooter manufacturers are free to enter and…