7. Is monopolistic competition efficient?Suppose that a company operates in the monopolistically competitive market for rugby kits. The following graph shows the demand curve, marginalrevenue (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 (Dolars per3822ESRR 210070200MO619 20ATCMR30 AS 50 40 70QUANTITY (Thousands of kits);Demand8100Mon Comp OutcomeMin Unit CostC en-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 eachfirm. Further, the quantity the firm produces in long-run equilibrium isthe efficient scale.True or False: This indicates that there is a markup on marginal cost in the market for kitsO TrueO FalseMonopolistically competitive markets may be socially inefficient due to the presence of too many or too few firms. The presence of theexternality implies that there is too little entry of new firms in the market.Save & ContinueContinue without saving

Monopolistic Competition is a market structure where there are a large number of buyers and sellers;…

Answered: Because this market is monopolistically…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Mario's Pizza is the only pizza place in Sorrento City. The graph shows the market demand curve for pizza in Sorrento City. Mario's Pizza is a perfect price discriminator. What is the marginal revenue from the 20th pizza sold in an hour? The marginal revenue from the 20th pizza sold in an hour is O A. $300 O B. - $4 O C. $16 O D. $15 40- 35- 30- 25- 20- 15- 10- 5- 0+ -0 Price (dollars per pizza) -10 5 10 15 20 25 30 Quantity (pizzas per hour) D 35 40 -S
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Under Bertrand competition, O the Nash equilibrium is marginal cost pricing (the perfectly competitive outcome) O the Nash eqt Nibrium is monopoly pricing there are multiple Nash equilibria O there is no set of strategies that lead to a Nash equilibrium
Can you explain it simply and clearly, especially the formula? Productive and Allocative Efficiency of Monopolistic Competition Price = Minimum Average Total Cost Most of the monopolistic competitive firms cannot achieve productive efficiency since they sell a higher or bigger price than the minimum average cost, and it can actually cost a loss of money in their minimum ATC. In monopolistic competitive firms they can also use their excess capacity but they would only produce a quantity equal to their minimum ATC. Yet they Might not be able to sell that in the amount without lowering their prices. So it's either reducing their profits or incurring losses. In addition, monopolistic firms doesn't meet the allocative efficiency. They cannot achieve it because allocative efficiency requires that Price = Marginal Cost. The monopolistic firm shows a downward sloping demand curve which means to sell more unit they must lower the price of all the units. The firm maximize profits when…
The market for agricultural products such as wheat or corn would best be described by which market model? O monopolistic competition Opure competition Opure monopoly oligopoly
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?
Air Canada and WestJet recently cut their prices for flights between Toronto and Edmonton to $199. In response, Porter Airlines cut its price from $239 to $199 for flights between Toronto and Edmonton in order to remain competitive. Based on this example, what degree of competition exists in the airline industry? Select one: O a. monopolistic competition O b. oligopoly O C. perfect competition O d. not enough information to answer O e. Monopoly B
10:43 A docs.google.com Your answer Syukri, Iqmal and Amir run the only shop in Wang Ulu. They sell electrical goods such as televisions, washing machines, etc. However, their objectives are different from each other. Syukri wants to make as much profit as he can, Iqmal wants to sell as many goods as he can without losing money, and Amir wants to earn as much revenue as he can. The graph below illustrates their respective profits. (Note: The length of each square on the Y-axis represents RM100, and the length of each square on the X-axis represents 100 units.) What is the quantity for Syukri? Revenue, Cost MC AC Quantity 100 200 300
QUESTION 1 Press F11 to exit full screen Which firm would earn profit in the long-run? O a monopolist firm. O a monopolistically competitive firm. O an oligopoly firm. O a perfectly competitive firm. QUESTION 2 Refer to the graph below for a monopolistically competitive firm. ↑Price MC 160 140 ATC 123.33 Demand 90 56.67 MR 100 133.33 154.92 Quantity If the above firm chose to produce at 100 units then the firm will be O earning a profit O incurring a loss O there is no profit and no loss O the firm can earn, profit, loss or break even
Kate and Alice are small-town ready-mix concrete duopolints. The market demand tunction is o- 20,000 - 200Pwhere Pis the price of a cubic yard of concrete and Ois the number of cubic yards demanded per year. Marginal cost is sa0 per cubic yard. Suppose Kate onters the market first and chooses her output belore Alice. What is the difference in Alice's profit when Kata enters the market tirst, compared to when they simultanecusly select ther outputa? When Kate entors the markat first, Alice's profit is $3,888.a0 lower. O When Kate enters the market fest, Alice's profit is 513,333.33 lower. O When Kate enters the market first, Alice's profit is $5,000 lower. O When Kate onters the market first, Alice's proft is $1.111.11 higher,
Suppose that a particular industry has a four-firm concentration ratio of 45 and a Herfindahi index of LS40. Most ikety, this industry would ochieve Mutipie Chaice both productive efficiency and allocative etficency wllocative efficency but not productive effcency nether productive efficiency nor allocative efficiency productive efficiency but not allocative efficiency
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

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