a. What can you conclude about the structure of the industry in which this firm is operating? O The industry is purely oligopolistic. O The industry is purely competitive. O The industry is purely monopolistic. O The industry is monopolistically competitive. b. Graph this firm's TR and MR curves. Instructions: (1) On the figure on the left, use the tool provided 'TR' to plot the total-revenue curve (plot 6 points total for q = and 5), (2) On the figure on the right, use the tool provided 'MR' to plot the marginal-revenue curve (plot 6 points total for a

a. What can you conclude about the structure of the industry in which this firm is operating? O The industry is purely oligopolistic. O The industry is purely competitive. O The industry is purely monopolistic. O The industry is monopolistically competitive. b. Graph this firm's TR and MR curves. Instructions: (1) On the figure on the left, use the tool provided 'TR' to plot the total-revenue curve (plot 6 points total for q = and 5), (2) On the figure on the right, use the tool provided 'MR' to plot the marginal-revenue curve (plot 6 points total for a

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Output Marginal Revenue Marginal Cost 1 $16 $10 2. 16 9 16 13 4 16 17 16 21 The data in the accompanying table indicates that this firm is selling its output in a(n) O oligopolistic market. O purely competitive market. O monopolistic market. O monopolistically competitive market.
Think about firms such as the Coca Cola Company and PepsiCo who competeagainst each other in the monopolistically competitive market for soft drinks. Eachfirm produces a unique product, but each of these unique products is to some extenta substitute for the soft drinks produced by rival companies.Now imagine a situation where the firms within such a market are facing suchextreme competition that they are unable to make an operating profit. Characterisethis situation diagrammatically and explain what will happen to the market, payingparticular attention to the exit or entry of firms out of (or into) the market.
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Refer to the information provided in the figure at right to answer the question that follows. Assume The Hand Made Shirt Shop has fixed costs of $150 and is a monopolistically competitive firm. If this firm is producing the profit-maximizing level of output and selling it at the profit-maximizing price, the firm?s profit is OA. -$100. B. - $50. O C. - $250. O D. - $150. W 25 23 22 18 MR MC ATC a 50 70 75 Quantity of personalized sweatshirts E Time Remaining: 00:56:39 Next
4. Is monopolistic competition efficient? Suppose that a firm produces polo shirts 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. (? 100 90 Mon Comp Outcome 80 70 60 Min Unit Cost 50 ATC 40 30 20 10 MC MR Demand 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of shirts) PRICE (Dollars per shirt)
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Macmillan Learning In monopolistic competition, advertising has been introduced as a new method to compete that differs from other markets. The following questions are centered around the topic of advertising. What two changes occur when a firm successfully advertises a product within the market? Supply for the product increases and demand becomes more elastic Demand for the product increases and demand become more inelastic O Demand for the product increases and demand becomes more elastic O Demand for the product decreases and demand becomes more inelastic What is the firm's main goal of advertising? Increase the elasticity of its demand curve Move the market closer to its natural, perfectly competitive state Increase product differentiation O Increase the supply of product in the market Which of the following would be arguments against advertising? ✔Provides a barrier to entry in the market ✔Lowers prices of some products May enhance enjoyment of the product Can lead to increased…
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D and E
Assume that in short-run equilibrium, a particular monopolistically competitive restaurant (Applebee's) charges $12 for each order of Chicken Parmesan and sells 52 orders per day. The average total cost (ATC) for those 52 orders is $10. How much revenue will the firm take in each day? $ What will be the firm's economic profit or loss on Chicken Parmesan? Next, suppose that other restaurants add/remove chicken parmesan from their menus (entry or exit occurs) and a long-run equilibrium is established. If the Applebees daily Chicken Parmesan orders remain at 52 units, what price will it be able to charge? $ What will be its economic profit or loss?
Exhibit 10.5 Price 3.25 3.00 2.50 0 700 1,000 MC MR ATC D = AR Quantity Exhibit 10.5 shows the demand, marginal revenue, and cost curves for a monopolistically competitive firm. At the profit-maximizing (or loss-minimizing) output and price, the firm would O a. have to expand to stay in business in the long run. O b. be better off shutting down, since total revenue does not cover fixed costs. O c. be experiencing an economic loss. O d. be earning an economic profit. O e. be earning zero economic profit.
2. Draw a diagram depicting a firm that is making a profit in a monopolistically competitive market. Now show what happens to this firm as new firms enter the industry.