9. Perfect Competition 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 paint (plus symbol) to show the profit-maximizing output and price for a typical firm operating in a monopolistically competitive environment. Price, Cost, Revenue Demand ATC X MK Quantity Marginal cost remains unchanged. The quantity increases ++ One day, consumer advocate Skippy lif discovers that all brands of peanut butter in Nutville are identical. Thereafter, the market becomes perfectly competitive and again reaches its long-run equilibrium. Average total cost decreases. Profe decreases ProMaxx Under MC On the previous graph, use the gray paint (star symbol) to show the market price in this case and the quantity produced by each firm. Which of the following statements are true for a typical firm in this market given the transition from monopolistic competition to perfect competition? Check all that apply. The price remains unchanged. harlect Camp, Culனால
9. Perfect Competition 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 paint (plus symbol) to show the profit-maximizing output and price for a typical firm operating in a monopolistically competitive environment. Price, Cost, Revenue Demand ATC X MK Quantity Marginal cost remains unchanged. The quantity increases ++ One day, consumer advocate Skippy lif discovers that all brands of peanut butter in Nutville are identical. Thereafter, the market becomes perfectly competitive and again reaches its long-run equilibrium. Average total cost decreases. Profe decreases ProMaxx Under MC On the previous graph, use the gray paint (star symbol) to show the market price in this case and the quantity produced by each firm. Which of the following statements are true for a typical firm in this market given the transition from monopolistic competition to perfect competition? Check all that apply. The price remains unchanged. harlect Camp, Culனால
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:9. Perfect Competition
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
AIC
X
M
Quantity
Price, Cost, Revenue
Marginal cost remains unchanged.
The quantity increases.
Average total cost decreases.
+
One day, consumer advocate Skippy lif discovers that all brands of peanut butter in Nutville are identical. Thereafter, the market becomes perfectly
competitive and again reaches its long-run equilibrium.
Profit decreases.
ProfilMaxx Under MC
On the previous graph, use the gray paint (star symbol) to show the market price in this case and the quantity produced by each firm.
Which of the following statements are true for a typical firm in this market given the transition from monopolistic competition to perfect
competition? Chack all that apply.
The price remains unchanged.
Parc Comp. Outcom
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