A profit - maximizing firm in a monopolisticallycompetitive market differs from a firm in a perfectlycompetitive market because the firm in themonopolistically competitive market Group of answerchoices faces a downward - sloping demand curve forits product. chooses its profit - maximizing quantitywhere marginal revenue equals marginal cost. can earnprofits in the long run. sells its product in a highly -concentrated market.

The study and analysis of commercial barriers impacting businesses using abstract economic concepts…

Answered: A profit - maximizing firm in a…

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 1.1P

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Similar questions

The figure below depicts a monopolistically competitive firm operating in the short run. Label the diagram with the items listed to the right of the figure. You will have to decide whether the firm is making a profit or a loss. Profit Price 8 25 OF 50 QUESTIONS COMPLETED -> At ед MR MC Quantity D ATC C Loss Average total cost Profit- maximizing price Profit- maximizing output SUBMIT ANSWE
Suppose you operate in a monopoly environment and you set your price inorder to achieve maximum prots. Is your demand elastic, unitary elastic, or inelastic? Does your answer change if you were in a monopolistically competitive market? What happens to the elasticity when you go from a monopolistic market to a monopolistically competitive one? Explain and give an example. Retailer companies sell many products for which manufacturers have a sug-gested retail price printed on the package. Is there an economic reason for this price? If you are the manager of a retailing outlet, what factors will determine whether you should charge the suggested retail price or some higher or lower price?
In what way(s) is a monopolistically competitive firm inefficient? Group of answer choices It charges a price lower than marginal cost. It produces where marginal revenue is equal to marginal cost. It does not produce at the minimum of its average cost curve.
Which of the following is true for a monopolistically competitive industry? * There are many firms, each with a small market share. The firms in the industry produce a standardized product. Firms are price-takers. There are considerable barriers to entry. O There is a small number of independent firms.
This figure depicts a situation in a monopolistically competitive market. MC ATC PRICE 100 8 882 889 229 90 80 70 Demand MR 10 20 30 40 50 60 70 80 90 100 QUANTITY Which of the following will occur in the long-run in this industry? Firms will exit this industry. This firm will incur losses. This firm will continue to earn positive economic profits. Firms will enter this industry. 40 10 30 20
Calculate the profit-maximizing price and quantity for amonopolistically competitive firm in the short run
If new firms enter a monopolistically competitive industry, an individual firm's demand curve will ---- (increase/decrease). A/
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 a firm operating in a market characterized as monopolistic competition is making positive economic profit in the short run attracting new firms to the market do we expect to happen to the demand for the this firm as new competi Demand decreases and becomes more elastic. Demand increases and becomes more inelastic. Demand increases and becomes more elastic. Demand decreases and becomes more inelastic.
In the long run, a monopolistically competitive firm will charge prices that are ______________ a perfectly competitive firm and will normally produce an amount that is ______________ a perfectly competitive firm. a greater than; equal to b equal to; less than c less than; equal to d greater than; less than
A small, local restaurant in St. Augustine, FL, serves scrambled eggs for breakfast. The market for breakfast scrambled eggs is monopolistically competitive. The following graph shows the demand, MR, MC, and ATC curve of this local restaurant. Use the graph to answer questions 3 to 7. Price (P) per plate $10 7 5 3 2 0 MC MR 50 80 100 ATC Number of plates of scrambled eggs served per day (Q)
FIGURE 10-1 Price MC ATC AVC D MR Quantity The profit-maximizing firm illustrated in Figure 10-1 operates in a monopolistically competitive industry. Which of the following best explains what happens in the long run? New firms enter the industry and the firm's marginal cost curve shifts up, which leads to a decrease in the firm's O output. New firms want to enter the market but CANNOT since there are barriers to entry in monopolistic competition. The market supply curve shifts right, reducing the equilibrium market price. New firms enter the industry and the firm's demand curve shifts left and becomes more elastic.

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